How Finimize CEO Maximilian Rofagha grew Finimize to $1M revenue and 10K customers in 2020.

hello everyone my guest today is max rafaga he's the founder of afinimize the world's largest and most engaged finance community he previously co-founded one of the largest e-commerce players in switzerland and sold it with 200 employees to the largest swiss media house he was a forbes 30 under 30 a participant in 2016 and also a tech stars mentor mac you ready to take us to the top absolutely thanks for having me that's great so when did you start building phenomize was it during the you building the e-commerce business or was it after um it kind of started a little bit as a as a side project um and then i really started to devote my time to it uh fully at the end of 2016. so i started the company in august of 2016. and and what is the company is it is it community play like how do you make money so we define ourselves as a community business uh and we make money through multiple revenue streams so we have three revenue streams uh we have advertising we have subscription and we have um perhaps most relevant for your audience the b2b licensing play as well um where we license content to other platforms oh that's really interesting so i think i get the ads model that's probably sponsorships in your email sends on your site peel back that onion real quick before we do the other two revenue streams what's the sponsorship to like your email list look like exactly so we we have a around about a million users members as we refer to them uh all over the world uh it's a very relevant target group for many uh specifically financial institutions and so they can buy access to to that audience primarily through the newsletter but also on the website some of our meetups etc and you can buy a daily or or weekly or like multi-month slot and get that brand awareness brand exposure um and education of the market about your product can we go deeper for there for a second so how many people are on the email list around about a million okay and when you send out a sponsored sort of dedicated email send how many typically open uh so we have uh pretty high open rates between like uh in the high 30s low 40 percent okay so caught 300 or 400 000 open and how many will click obviously this is very dependent on how cool the sponsor is right if it's a bad sponsor low clicks good sponsor who you love more clicks what's a good sponsor get uh that really depends uh as you say i mean we see like 10x variances oh wow it really it really depends like some stuff really resonates uh and some stuff uh i think there's not not as much as a sort of a partner audience fit uh and that's why sometimes we do we do test campaigns and people can try stuff out test our audience and if they like it they do more and if not they they had a pretty minimal exposure what what would you know something that resonates well what would you consider resonates well on 300 000 opens they're going to get how many clicks i mean that can range from anywhere from like a thousand all the way to like thousands of clicks in one day and really there's very very wide um uh uh variants there so how do you manage i mean a lot of spawn folks who have a sponsorship newsletter the morning brew style the stacked marketer style druid trend style the sort of sub stack you know subscription plus sponsor style they have the same issue you're never quite sure how well sponsors are going to resonate and if you sell them a number of clicks and then don't deliver like what do you do so we don't sell we don't sell clicks we sell opens as i think is the case for many of the newsletter products out there um and so we say hey this is how many opens we estimate that you're going to get and then we charge you on an open basis um and that way we're incentivized to actually deliver your ads to the audience and they they open it um but that you know we can control ultimately whether someone's going to click onto your onto your product or onto your ad what we do is we do a b testing we work very very closely with partners we have our in-house copywriters produce the produce the ad copy so that it feels as native as possible um and then we just try and do our best uh also to apply our experiences there yeah so what would you charge like when you send your media kit out to a potential sponsor 300 000 opens a million and let's just say they want to test one cent what what do average rates look like uh that's something that you'd have to talk to our sales folks with that's not something that we just would publicly communicate because there's so many different parameters um involved here um what's the what's the duration etc so uh probably one for for our sales team can you help us get like some sort of concreteness or less vague just so people can learn live so pitchbook came on the other day they've got a list that's about your same size about same open rate they said you know look it obviously varies on a lot of stuff but we charge on average about seven thousand dollars per cent to be included in the send uh the number of clicks we're not responsible for but it's about seven thousand they get about 250 000 opens i mean is it fair to say you guys you know somewhere between maybe like five and ten grand per per placement something like that yeah it's probably in a similar ballpark to some of the other players in the market for sure okay so so that's one business model tell me about the other ones so then we have uh our consumer subscription um which is a uh premium uh premium content play and the um end users essentially pay us uh 59.99 pounds or uh i think in the us it's uh 79.99 us dollars depending on it depending on the day exactly depending on the day very much uh and what that does is and that's per year per month correct per year okay um and so what that does is it unlocks our full content library which is currently primarily in the app but we're also building out a web app for this we have over a hundred different audio guides long form audio guides that explain anything from how to how to think about investing in microsoft or how to think about google's mood shot when you think about their investment thesis there and but the primary driver that we see why people buy this is we have two products one is we have a daily brief so we we basically explain to you every single day in under seven minutes as an audio product uh what's happened in the world of finance very similar to our newsletter um and then we have our analyst insights which is i think personally the most exciting product and what so we have a whole team of analysts who previously worked with goldman sachs and bloomberg um really really uh sophisticated financial experts and they share their views and opinions on investing opportunities investing trends and so you can learn from their insights and that again is available in text and audio are they full-time employees of finimize or they volunteer their time and analysis no it's uh it's our we have a full team of analysts one of the core assets that we that we have is is that team except how big is that team uh i think we are now six people oh wow six analysts wow and how big is like your whole the whole operation everything all together how many total team members um including a couple of like part-timers uh i would say around about 30 um between 25 and 30. yeah depending on how you count it yeah so we're pretty lean but uh but it works yeah well hey there's nothing wrong with being lean nothing wrong at all all right so newsletter membership consumer subscriptions and the last one and so the last one is our api business which is a sort of our newest business which very much came out came up from uh inbound that we received oh wow um so what happened so what happened essentially was um we started getting a lot of investment platforms a lot of brokerages come to us and say hey we have a huge user base we're struggling a little bit to activate uh all of them and we want to use content to activate them um there's a couple of examples you know robin has done a decent job with this um you're starting to see an e-trade uh those kind of guys in their latest earnings reports talk about how content is a major activation driver for them and so these platforms come to us and they say hey you know we've tried content ourselves we couldn't really crack it we love the way that you guys do content can we have it and so when we when we started to receive a couple of these inbound requests we uh we thought about what can we do and we essentially uh created an api and now you can go and plug into our api and pull um sort of a product palette that we've created from daily weekly news text and audio and plug it directly into your own app um and so then all of a sudden you have a really really nice content library and then we sell that to you in an annual as an annual license very interesting and are you able to have expansion revenue on that i know it's new but can you drive expansion revenue on that product based on like number of api calls annually or project a number of api calls yeah so i think right now we're we are early days and so we're just doing a flat fee okay for a year on the on the product that you're doing but 100 what you said so obviously one of the things that will be interesting is to start charging based on...