Findo Revenue, Valuation & Funding (2017)

this is the top where I interview entrepreneurs who are number one or 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 top 5 and6 million he is held bent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka okay top tribe this week's winner is is Charlie dags okay he was a middle manager at a Manufacturing Company he wants to break free and he won the $100 I give out every Monday for your chance to win simply subscribe to the podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it top tribe you know I don't have a lot of time to waste that's why I use fresh books to send out invoices and make sure I'm collecting my money to get your free month go to Nathan lad. slf freshbooks and enter the top in the how did You Hear About Us section Nathan L here this is episode 602 and coming up tomorrow morning we hear from the CEO of Alaska who's 29 years old with one kid his name is enrio casadi they've sold 20,000 Italian shoes to over 15,000 men and they're growing so fast they did 1.6 million in 2016 revenue and they've raised over $750,000 uh to to date good morning everybody Nathan laa here our guest this morning is Gary Fowler he's the co-founder and CEO of findo findo is a smart search across multiple platforms for email files and folders Gary has over 23 years of a startup experience he's an award-winning CEO a senior executive and speaker with over seven technology startups and a successful IPO with the company cks W Gary is known as the goto startup CEO that gets stuff done Gary you ready to take us to the top I'm ready good okay thanks for joining us so tell us what findo does and what's your Revenue model how do you generate uh money so findo the the challenge that we all have today is that we have a tremendous amount of information that's within our own own personal cloud Nathan and that that amount of information if you look at the average person has about 300,000 items well the internet the number web sites in 1996 was only 257,000 and that number's doubling every year so think about all the all the email addresses and all the information your email addresses your Dropbox your box your Google Drive your one drive your drive on your um laptop all this information in these desparate places what we allow it to do is to be able to search from one place using natural language we're an AI tool so in it's learning all the time so those hundreds of hundreds of emails that you get every day to be able to search through them and prod provide insights so M Mike and then real quick before I ask this question how do you generate Revenue so we we have a subscription model so um the subscription model is a monthly basis we've got an advanced at uh $4.99 per month and we've got the ultimate at $9.99 per month so what that means is that you can search as far back with as many accounts that you want with the ultimate and the advanced is a uh six months worth of History okay so this is a s SAS platform yes okay and so we don't have to get into every specific plan just give me an average what's the average customer paying you per month the average customer pays us per month is uh $9.99 most of them are going for the advanced model okay got it okay great and then let's go back here and get some history uh when did you launch the business so the business was spun out of my part my partner is one of the top AI seral entrepreneurs Who David Yang okay and uh he's done nine startups he uh we spun out of a his company uh Abby and um created a US Corporation I became the co-founder and CEO of uh the US Co Corporation with him and I've known him for four years we're friends and and how did that spin out happen like had the had the parent company like raed Capital did it need board approval why did you make the decision to spin it out well we spun it out because the U Ab Core businesses working primarily with uh scanner manufacturers and this we understood that this is way be Way Beyond that because it's such a pain point that each one of us has you know we know the file exists but we can't find it why we don't know where it's located or we've forgotten to keyw and so it's really not uh it wasn't aby's Core Business so we spun it out we bought the IP and and now it's ours what you bought the IP from Abby yes you and your your uh your co-founder who's also the CEO of Abby my co-founder is the founder of Abby the founder how did you manage conflict of interest there like how did you come up with the right price to buy the IP when he was also the CEO of Abby how did we come up with the right price because we had it uh independently evaluated oh got it okay so and for people listening right now that are thinking about spending out their own company and they want to figure out how to do this independent evaluation how do you go find someone to do that what's the search term what's it called so what's uh going out to find in independent evaluators what's it called yeah like how' you find the person to do that so you look at people that can actually go out and evaluate companies so there there are companies out there that allow you to uh do that and and that's their uh job their job is to be able to look at a company and figure out you know what what is the value of that and how much it's worth and what did you so what did you end up buying this kind of out of the main company for was it you know millions of dollars or hundreds of thousands or less it um it um was hundreds of uh thousands of dollars and folks would wonder when they hear that well where did Gary and his partner where did you guys get this Capital was it just your own personal savings or what no so we had had a um we had a investment by the a parent company and um so we took as some of the proceeds of that we used that as a as some of the that was one of part of our u a seed one round oh I see okay and how much total Capital have you raised to date $7 million okay got it that's helpful and so they LED your seed round so I guess what I assume you're up to series a well right now we're we're series C2 we had two rounds our our C2 round uh was with a a group called Flint capital and we also uh as part of our C2 we had um the uh uh competitor of adobe Fox that actually was one of the major contributors to the uh part of our seed to so um every uh PDF reader that foxit which is the um competitor of adobe has will be including a findo within it so that be up to six and a half million a month and Gary what is sorry six and a half million a month of what million copies of their PDF reader oh I see you said your seed 2 why why do people say seed seed one seed 2 instead of just going and saying this is series a series B series C uh because we you know from our standpoint we really looked at it as a as a seed round so yeah but me understand what that means so someone listening right now they're going hey should I raise a seed a seed B seed C or should I go raise a series a how did you like tell me why you said it's a a seed two because we just we broke it up into increments and we didn't need you know for this round we weren't looking at 10 to 20 Mill ion dollar what we were doing is we were looking for um an investment and the first part of it the first part of the investment the first $3 million we understood that that was uh you know looked more like a seed round and the second part of it we we just didn't want that much money so we were CAU we were you know between a series a and between a c so we decided to uh call it the seed round which from my standpoint was the the best thing for us to do so are these all are these all all debt rounds convertible safes kisses Etc or have you had an equity priced round we've had the equity price D okay was that the 4 million after the three was the 4 million price is that how it worked yes okay got it okay great let's okay let's go back here and and capture more of the story because you've had some you've had a lot of success even before findo what was the year that you officially spun out and launched launch the company uh last year okay so or like early 2016 uh April okay okay April 2016 and what were you doing before that so what was I doing I started the most successful accelerator in uh in Russia and we had done over 185 companies over three year period of time which accelerator was that GBA launch gurus GBA what launch gurus gurus and how do you you say most successful in Europe quantify that for me how do you measure that well so so we had over uh 60% of our companies had raised money which is really unheard of you know one out of uh one out of uh uh 10 are generally uh successful and have raised some money and we we counted success as being able to uh they were still functioning right they were still in business what did the uh uh how did you guys fund the gva in general did you guys go and raise from a bunch of LPS or was it kind of State backed or what no we had some uh we raised some seed money okay what was what what was the size of the fund that you were investing out of yeah we raised a million dollars okay okay so this is you were doing kind of micro you know 102,000 kind of seed almost like 500 startups model is that accurate No No we we raised so the million dollars with the investment into a gba launch gurus uh the fund we created is a $10 million fund to do Investments into the the company so there's two parts one is we raised a million the other part is we had a $10 million um uh fund cre you raised a million to get the the the the thing the global Venture lines going at all and then you raised a $10 million fund which gva was responsible for investing in in seed companies yeah gbaa launch cers got it got it okay very very good um have any of those companies exited um they haven't uh yet and um they haven't yet but some of them are uh becoming uh you know pretty mature so there's several of them that that could happen to but you know we only get it it there's some of the companies are still uh they're growing but they need some time what um okay so why' you leave that to to join and launch findo or findo because we you know from my standpoint I was at that time I had been over in uh Moscow and Russia and um you know had done most of my work for my career in Silicon Valley and I decided that Silicon Valley was the best place that uh for me there was a lot of things happening here and things were slowing down with the current uh economic situation in Russia and so it made a whole lot of sense to uh um have my managers over there uh run the company and I decided to come over here and so fast forward again specifically now to to findo what's your team size today 26 okay all based all based there in San Fran we have people here we've got uh folks located in uh Russia we've got some other uh folks located in um other places in Eastern Europe and and why did you choose to have folks in Eastern Europe was there just a kind of a leverage there in terms of kind of salaries and things or what well because well I mean the salaries are one thing but the other thing Nathan the there's some uh in terms of artificial intelligence And my partner's got his PhD and AI I mean one of the things is you need to find the kind of talent one is where is it located two is how much does it cost and um you know we have within Abby we uh David has 700 Engineers so obviously he has a you know handle on that market so we look for skill sets we look for um a pricing model and we look for people to get stuff done makes good sense and then from a business perspective how many uh how many customers do you have are you working with up to date January 2017 how many customers do we have well so in terms of so we just came out of beta in October time frame and right now in terms of registered users we've got over 80,000 okay and how many of those are paying we've got uh so in terms of the uh paying it's a h small perc um 7800 right now okay um in in that range pretty I mean that Gary that's I know you're just starting so you're cautious to share this because you might sense they feel low but one everyone has to start somewhere and two 700 out of 80,000 registered users is almost a 10% conversion rate which is fairly High well not 10% that's a 1% sorry you had seven you said you had 7,000 registered users no I said we have uh uh almost 880,000 oh oh oh got it okay so you've got one okay 1% yeah got it and then can I do I was going to say wow that's that's great but I think the math is up no no no no no I I thought you said 7,000 registered yeah so 1% it's it's almost 880,000 yep okay about 880,000 and then can I do the math can I take 700 customers times an average RP of about 10 bucks to assume you're doing somewhere around seven Grand in Mr currently it's you know it's something like that we're you know our situation again we just came out of beta and we're moving into um as of this week we're moving into the model we're using a channel strategy with uh findo so um we're working with Partners so foxit will be Distributing as of this week in Australia so our numbers have been low so far but I expect those numbers to increase dramatically what's uh of the 700 customers has anyone left you yet what what do you think gross kind of monthly customer turn will be um you know it's it's too early to say right because the situation is that once people try it they stay has anyone left you that moov to a paying account yeah of course they leave yeah that's the question right so is it like 1% of the 700 10% 5% um it's anywhere between um you know five and 10 but then this thing that's really interesting is that people come back right that's another thing it's called um and I've never seen that phenomenon before where actually people have left and then they decide to come back onto the service well sometimes I mean like Constant Contact actually that a lot before they just exited to EIG and one of the things they saw is people would come to an email marketing campaign with them during Black Friday cancel their sat their subscription you know account then go sign up again it was very seasonal and it was actually very difficult for them to build a scaling kind of SAS business because of that do you worry about that well I mean look at this thing Nathan look at them so each one of us had 300,000 items in our cloud and within the next five years we each have 10,000 taking the internet of things all these think average consumer will have this these many things in the average average average consumer right I've got over 2 million and I suspect you have uh probably close to the same number yeah I have a lot and so the situation is you know and think about the pain you have 12% of the population uh at one point in time takes every 24 hours 12% of the population has a problem it takes more than 15 minutes to find something why because you don't know the key wordss and you don't know where it is is it a drop box is it an email it's hard to find we and the thing is that we do is imagine being able to search by description but imagine able also to be able to search pictures imagine to be able to provide a predictive insights what that means is that so you know that this the system knows that this person is very important to you and so through a bot in Facebook telegram Skype slack it actually brings it up says you might want to take a look at this here's one it puts a little fire alongside it that's important for you yep no hey J makes sense we're running short on time here so I'm going to just fire a few more before things that you have you paid any have you spent any money on paid acquisition yet any paid marketing sure we had we're we're really uh winding that down we used it to uh build our uh set how much did you how much did you spend to get the 80,000 registered users um no I don't want to give you the exact numbers on the situation but we spent a bit to get to the uh than 500 Grand or less less okay less okay less than 100 grand um I won't ask another I promise yeah it's um it's a little over um $100,000 so actually wasn't that much yeah that's not bad okay top tribe as many of you know I sold hoo and Everyone is always asking me what my expenses were when I was building hoo well a big expense was that I spent over 3 Grand per month on financial services to keep me out of trouble in terms of tax you know my mom would always har me Nathan you got to keep all your receipts and put them in a freaking box or something to make sure you don't get an audit or things like this I'm like Mom I'm a millennial you think I'm going to keep all these receipts I now use fresh books I use their mobile app to take a picture of receipts and it makes taxes a cinch additionally I don't have to hire a $33,000 per month person to manage all my finances it's like saving so much money and my mom's happy additionally I don't waste a bunch of time creating invoices I use their templates and I can avoid using word templates or Excel files I just use fresh books to quickly send out invoices and it works like a charm to get your free first month go to Nathan l.com freshbooks and enter the top in the how did you hear about a section again go to Nathan l.com freshbooks and enter the top in the how did You Hear About Us section okay good hey let's wrap up here with the famous five Gary number one what's your favorite Business book ah my favorite Business book is uh uh think Rich Grow Rich Napoleon Hill long time ago I read it Think and Grow Rich number two is there a CEO that you are following or studying right now Elon Musk number three is there a favorite online tool you have like Acuity scheduling and besides your own um you know find though I got to tell you I mean I besides your own what's one that you use to run the business to grow it project management anything um so we use intercom okay and be able to keep statistics for um our users number four yes or no do you get eight hours of sleep every night never and what's your situation married single do you have kids I'm married you are married yeah and how many kids I have two two little ones all right and uh and how old are you uh so I am 59 all right Gary last question take us back 39 years what do you wish your 20-year-old self new you know I got to tell you I had my first startup at 21 so what I looking now I would say look back um I would have spent a bit more time um uh trying to get uh uh deep more deeply involved with apple actually there you go there you go he wishes he spent more time getting involved with apple from Gary Fowler move from Russia and gva over to start his own company with his partner called findo they're now at over 880,000 registered users about 700 customers paying on average 10 bucks per month doing about 7K in mrr Gross turns somewhere around 5% still early they spent about 100 Grand to get 80,000 registered users again that's an estimate they've got their team of uh 26 people between San Francisco Russia and other Eastern European countries again helping you search all of your files be it on your devices on your Cloud your computer or anywhere else they've got 7 million bucks to put towards that cause Gary thank you for taking us to the top thank you very much if you enjoyed Gary today go back and listen to shashan yesterday the CEO of tap Chief has passed 75,000 minutes of experts teaching students how to uh all kinds of things anything they want over $150,000 raised to dat with their team of 10 top drive I love giving away free money I feel like o we're giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're 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