Filestage Revenue & Funding (2024)

hello everyone my guest today is Nicholas Dorne is the co-founder of the SAS company file stage which is a solution web application that makes it easy to share comment and approve videos designs and documents allowing customers and colleagues to mark change requests directly online in the file this helps to avoid long feed backgrounds via email before that company used to work in different companies around marketing advertising any commerce in that time experienced how time consuming and painful the content review process could be especially when done via email that's what led him to file staged Nicholas are you ready to take it to the top yeah definitely this is this is definitely a problem I think as people create more of their own content everyone goes back and forth via email with their designers for changes and things like that it is scary bad sometimes so tell us what you guys do and how you make money yes as you introduce myself as say I used to work with marketing and that's how I we started and main problem we had back then was yes we produce content like amazing video his designs Flyers brochures everything like that and actually it was sent via email and Andy and yachts and like an email back and forth 40 emails for just one minute of video and everybody was was was driving that sexy and we said okay why isn't there a good tool an efficient process nice workflow and that's how we started five stage and today five stage you can imagine a bit like a Dropbox so it's super easy and intuitive to use it's a web application so you can basically just drag and drop your files into five stage then you can share link for example to your video you just drop there and then you can discuss all together your video and give feedback within the video just in the file yeah and you can approve it exact it and so on yeah and so the customers today I mean is this a pure place ask company and if so what are they paying threat to you on month average mm-hmm yes it's a pure sauce company and we started actually pretty small so we started with freelance a small agencies and so on and then we grew from there to to bigger agencies to marketing departments at the moment like the typical smaller agency is paying around $100 a month and the enterprise is paying more custom plants if you took it like that just an average just to avoid every customer cohort is a hundred bucks a month affair average or is it a bit higher I would say overall it's it's a fair average because we also have like smaller ones but yes we also have these Peaks yeah great and take me back to day one so what your Jalan two company in sorry what your did you launched the company in when here what year did you launch the company okay sorry Kagura yep in 2015 2015 and I mean where was your head at that point you were doing a lot of professional services work marketing advertising e-commerce stuff or did you like quit a full-time job to jump into this yeah basically it was right after after my masa so I used to work before then I did another masters in marketing and that's where I yeah where I met like the connection with my co-founder and from this we started Bev so yes like a background in advertising and the film industry and he always had this problem itself so we connected like at this moment and she said okay we started interesting okay so 2015 and then what have you scaled to today in terms of total customers we have a customer base of around 400 paying customers so teams okay and then they're like 60 70 80 thousand thousand users so people that review and work with I said yeah that's great so 400 customers at $100 or poo is it fair to say you guys are somewhere around 40 grand a month right now in revenue more or less yeah okay more or less and give me a sense of growth rate since you're still kind of early but take me back a year ago what were you doing a year ago a year ago we were like I don't know making maybe [Music] 5,000 MRRR so really a big big jump yeah so what's driven most of that growth how are you getting new customers so main main acquisition channels at the moment are really like cold mailing so automatic cold mailings and the other thing is like really like getting referrals from customers really what works well for us how do you incentivize that how do you drive that behavior at the moment we we have someone simple thing actually it's we just say hey if you bring us a new customer you get one big bottle of champagne from us and so far it worked pretty fine so actually people are just like hey we like you so much we just recommend you it's fine we don't need like incentives but for sure we're working on something to push this even more eeeh how many bottles of champagne have you shipped around 20 maybe and so when you look at kind of your fully weighted customer acquisition costs what would you say your cactus what's your cost required as customers all-in so actually we have like at the moment we have zero marketing spendings at external costs so no Facebook advertising anything like that so zero a year and then we have internal costs and this is like we have to do full-time people doing marketing for us and then it's mean Said's and another person says yes so when you add up like you know all the salaries of people willing to sales plus the champagne you're sending out right listen a referral fees or kickbacks I mean and then you divide that into the number of new customers you guys land per month I mean what is your attack right now fully weighted last time I calculated was the wound I think 300 400 euros okay I mean that means your payback period is what somewhere around you get that money back in about four months is that accurate okay so we would really like yeah bootstrapped and lean here so I was just gonna say that so you're totally bootstrap right now right almost so we we landed like a German investor last year which enabled us to really grow the team and before we were just like the three founders and a couple of interns and this way we really could build like the team and yeah it's a German investor but it was not like you're really lodging that's how much did you raise 600 K pretty healthy amount so 600 raised and then with the team size today around 11 people okay full-time and a couple of other people here and and you said four of you two of them are full-time on sales plus you and one of the persons of four kind of sales breakdown the rest of the rest engineers yes okay so it's like one person that is half like sales and half customer success than five people yes in in development then we have one in UX got it and you know a churn is obviously critical a SAS company tell me about your turn yeah honestly we have like two symptoms we recognized so actually we had like a rather high turn on freelancers and smaller counts what I mean we're talking about eight percent of a high six percent seven percent something like that and then we really went like into into data and we talked to the people because as a founder you'll be like oh my god why did I turn a why do they don't use it anymore so and 50 percent of these users said hey we really like that software but we actually run out of projects and for us this was like a signal to say okay maybe it's better to focus on like bigger clients where they have like continuous business to work on a five stage and in this sector we have like you turn rate of 2% to 2.5 percent something like and that's gross logo churn per month or revenue sure the first was like revenue churn yes with D with the smaller ones so six percent how do you how do you define it is it before after you add an expansion revenue it was after okay so that's a net number then yeah okay it just to be just to be clear like in a year if you teach if you churn at a gross level 10 percent of your revenue that would you know that I mean you have 90 percent gross retention but if you upsell your current customer base by 20% well you take the 20% and minus the 10% loss so your net expansion is still 10 plus so just mean if they're your net revenue turn per month was 60 percent in a smaller cohort yes yeah I mean it was 2 2 and it was 2 to 3 percent in the enterprise cohort monthly okay and and what is I mean what are you doing to drive that those numbers down or up how do you make them better so one strategy is really like first of all focus on the product so the better the product the less journey I seem distant number-one thing second thing is that's relative right like how do you bets the whole problem right though is you might think like what does better mean how does better actually equate to stickiness mmm better for us means it's easier to use and it's actually completely solving the problem somebody has so it really fits like the pain so that's the number one thing but what if it's an effect but the enterprise customer still runs out of projects they're still gonna cancel even if it's the perfect product I think then you don't solve the reader problem okay so say whenever you you solve a problem that has like business relevance then people shouldn't run out of problems otherwise it's just like a minor problem you solved well see like it's interesting question is like you could argue like what you're doing is not that should not be a sass pricing model right cuz you actually are solving a very real problem I know this problem but I also don't run projects 24/7 so I wouldn't pay monthly for it but I'd pay per project or something like that so like when you have an enterprise account that is like addicted to you when they're doing a new video release or something you've built a perfect product for them it's me but must be so frustrated and see them churn when they're telling you we love the product like that's the worst place to be in because then you don't know what you don't know what to do to fix it if they tell you it's perfect how do you handle that frustration so basically for for enterprise clients we haven't had it because they never run out of projects that were recognized every percent sure yes but in enterprise we never had any insurance so far in let's say in mid marketed we had as so agencies and so on but these word and people that were like saying okay it doesn't fit with our customer base we don't continue because of these reasons but in most cases yeah we haven't had like shown because they ran out of projects in this case but the smaller ones they always told us we run out of projects I don't want to spend money on this but I say okay what is your what do you might have iowa's on these customers once you close them I feel boy sir what do you assume lifetime value is on these customers once you close them so for the smaller ones it's between 1500 something like that on average and for the for the bigger ones it's it's way way bigger and last question before we jump into the famous five where you guys all based the headquarter is it's in Stuttgart Germany but actually really like your remote team so half the team is not working here so we have one personal Portugal one in Spain one in Romania run Russia so it's really like all over the place with the famous five number one with your favorite business book it's the ultimate learning machine ultimate States machine sir yeah that's a good one number two is our CEO your phone are studying right now not really new number three besides your own with your favorite online tool for building your business intercom number four how many hours of sleep to get every night eight dollars that's okay that's good and what your situation married single you have kids I have a girlfriend since ten years oh yeah all right and how old are you I'm 31 31 hi Nicholas last question what he was your 20 year old self new to start a business earlier and to negotiate harder so that's what I learned in business I think you guys start a business earlier negotiate harder he saw this problem internally when he was doing marketing and sales inside kind of agencies and such where it was very hard to collaborate on video edits and document and it's things like that so he launched files stage with on that with one of his friends back in 2015 bootstrap the company then raise $600,000 they now for our customers paying on average 100 bucks a month so about 40 grand and monthly recurring revenue that's up from 5 grand in mor just about a year ago they've got two to three percent net revenue churn monthly and their enterprise cohorts $400 tax so four month payback period lifetime value is north of two grandi and helping solve a very real problem with her team of eleven based between Germany and other remote locations Nicholas thank you for taking us to this off thank you [Music]