Foxy Revenue & Valuation (2023)

hello everyone my guest today is Brett Florio he's a full time traveler and co-founder pro manager at a company called foxy dot IO back in 2005 he needed a way to add custom e-commerce to existing systems as such he launched foxy two years later with the hunch that others needed the same thing ten years later Fox he's handled billions of dollars in transactions from merchants around the world when Brett's not busy with that you can find him playing bluegrass Brett are you ready to take it to the top yeah do you have your instruments laying around I want you to play something for us I do I have a whole wall right over there the camera can you point the camera to it or no is it a fixed camera you know I can let me see the wall that looks like it's a little bit more fixed than I thought it was that's okay we won't mess with it we won't mess it so a billion in transaction was interesting I mean Shopify immediately comes to mind tell me what you're doing how you make money so a foxy is Shopify as an obvious comparison Fox sees a bit different we are hosted like Shopify but we are built to integrate into existing systems we're not a CMS we handle just the cart and the checkout so it's not turnkey it's not you know just choose a template and you're up in five minutes what it is is a hosted cart and checkout that is extremely well-suited for adding to existing or it preferred best-of-breed solutions so if you're a web professional and you already you know you already have your CMS of choice your framework or you're working within a SAS or an LMS or what have you foxie can go in exactly where you need it it's built to integrate it does everything so it's much better suited for highly complex highly advanced versions yeah right and also quick and easy integrations as well as if you have your own SAS you know you can add Fox you can embed it white label it so your users get all of the power and flexibility of Foxy without ever needing to actually go to foxy without needing to be you know developers themselves so this sounds a little bit more like maybe like stripe than Shopify yeah so where we support a hundred different payment gateways including stripe so you could say well I can do some of that with stripe you can and then you need taxes so okay now you're integrating taxes Dunning for recurring billing okay now you've got that and now Oh PayPal - well that's a whole different integration and Amazon pay another whole different integration I can see with stripe - I mean it's really hard to like create a lot of proximal fly if you have a big ecommerce brand it's not easy to do that what you're saying is you really service the e-commerce needs of folks and that's why you're beating stripe out on ecommerce deals like this yes so you know a lot of people especially larger businesses aren't going to stripe they're using Paymentech or vanta or what have you so you know I automatically stripes out stripe is fantastic I don't want to give the impression that stripe isn't a wonderful system but just does one thing we do more but but again we do less than let's say Magento and that's very deliberate very intentional magento shopify gets you an entire website which can be great if that's what you need but if that's not what you're after you get a lot of extra stuff that you that's just gonna get in your way all right any city or travel or and you like bluegrass well bluegrass instruments cost money how do you make money on this thing we charge monthly or annual fee as well as an additional small transaction fee unlike some others it's not a large percentage so we do cap that how soon can you share us how small it is like definitely under what so it's it's 15 cents a transaction that goes down so unlike some others where it's 2% you know for us it doesn't matter how many zeros are on the end of of the order total it doesn't you know whether it's a $10 order $1,000 order okay you know we don't really feel like we're justified in taking a percentage so just to be clear let's use an example if there was $100 ecommerce checkout system and someone's using you guys versus Shopify what will they pay you for $100 transaction what would they pay Shopify depends on the plan but Shopify it I believe starts at 2% of that so you're looking at $2 where we cap at 15 cents and go down with volume Oh interesting so there it there literally is no percentage stake right the only time where that wouldn't work out is if it was like a sale for like a dollar it's so right so it's it's technically our pricing is technically half of a percent up to a maximum of fifteen cents I see so if it's a dollar transaction you're paying half percent like that yeah so interesting so we we have we have thought of that we've been doing this we'll be 11 in April so a lot of these a lot of these things have different the fringe the fringe cases yes and fringe is great except when it's shipping we have we have a saying on our end it's I hate shipping because you can't please everyone with shipping so ok so 2006 you launched you make money based taking up to 15 cents per transaction or down to you know half a percent whatever one is cheaper for the for the checkout or for the customer you also in turn you have a SAS model so on average what our ecommerce brands paying you to use your platform per month the the huge bulk of our users are micro and in the sort of micro SMB so the most of our users are just paying us $20 a month okay so 20 bucks but then we we do have you know many users that are doing much higher volume or we we have enterprise users that don't necessarily do high-volume but you need very specific things like multiple different payment sets in different parts of the world different custom integrations with s AP things like that well just figure you think twenty if I averaged all that together the big and the small you think a good average is about twenty thirty bucks uh well the average is is higher because when it does go higher it goes higher but they they said you know getting into means and medians and such but the average user let me let me ask this a little bit differently because I want to understand is there any one single customer that makes up more than five percent of your revenue no okay because that would give me a good sense if you're really cater towards like one big enterprise customer or something right yeah okay know you're at scale good and okay give me more of the back story here so so what is your team now look like today eleven years in so eleven years in we are still a pretty small team we're under ten we're about half in the US half international everybody is fully remote we we have very low turnover we have a wonderful team and really everybody on the team appreciates we try to get people who appreciate work/life balance we're very family friendly you know it's not uncommon at all for somebody and slack to say hey I'm talking out running to the park or doing something with my kids or whatever and that's that's really important for us I learned in previous business experiences you know if you don't if you can't enjoy what you're doing it's probably not worth doing if you know if there's a better option now that makes look I love it I think it's a healthy approach now what have you scaled to today in terms of total customers or total users using the platform we don't share that publicly but I'll say it's thousands okay cool can we put it can we put a rain join can we say north of a thousand but less than caught 5,000 is that fair uh yes okay good I just wasn't sure if you were talking like fifty thousand ten thousand but right between one in five yeah okay good so between one and five and how have you I mean where are you getting these folks is there a playbook you're following to drive customer growth and if so give us a little hint of how that works good question we are admittedly not great at marketing we're much better at building the platform and supporting it and getting something that people like to use and tell their friends about we have done very very little real marketing over the years we just last year was the first time we experimented with pay-per-click we've we've done a small number of banner ads we do some how big Bret was that experiment you're talking like five grand experiment ten grand what oh no we ended up doing try to think here more than that we ran it for a while we really tried in earnest to to make it work and it wasn't an abject failure but it definitely was not something that we thought yes this is fantastic this is when you were doing that what I mean obviously you have the data what was your tackle were you paying for a new customer on that paid spend Oh obviously it didn't work because you're not doing it anymore but for we the the problem honestly is the the numbers were such and our onboarding is such that we offer an unlimited free trial so you only have to actually pay when you want to take your store live yep so when you want to collect real dollars from your customers because we're developers ourselves we know that most developers in projects are not wrapping up in 14 days sure especially with with what we do so we have to sort of use proxy measurements to say well if if a user is not logging in then they're probably gone but it is tricky the acquisition cost per customer with that experiment was honestly I don't remember at this point but it was not worth what was it definitely north of I think it was definitely north of $100 you're asking about it okay well I mean that's a horrendous at a $20 per month price point right I mean you get back pay back in five months yeah it actually it may have been much greater than that because the lifetime value is I like some value is pretty solid and our churn is very low what's this by the way like some two percent per month have right around there okay that's a logo turn a revenue turn that is can you yeah that's the reason I the reason I ask that is because if you lose one Enterprise logo out of 1600 customer or a hundred thousand customers that the percent logo turn will be really low but if they make up ten percent of your revenue that's yai revenue turn right it's it's roughly the same again because we don't have any users even amongst our enterprise with it constitute so much two percent two percent is true for both low aterna and revenue churn per month and you said pretty confidently that you have a very stable LTV well what is that and how do you have such confidence in that metric we have confidence because it's been stable for 11 years for a long time but I I would rather not share the exact number how do you calculate it like I just for other people looking to calculate helps me for themselves we use KISSmetrics and and sort of use that is their calculation which is I believe reasonably sort of standard but we've also calculated it in different ways and you know even when we're running our own data and looking at different ways to calculate it it's it's pretty consistent okay regardless of how we calculate I mean the general information on the internet when they people talk about is TV is they take one divided by their logo terms of point oh two means they stick with you for fifty five zero months x that twenty dollar price point gives you an elf to be around a grand I mean I know you want to say the specific number but generally speaking is that how you're calculating it something like that yeah roughly like that okay interesting and no paint spend now today it's all organic growth yes we'vewe've yeah and again we we really haven't done much so that is definitely an area where we know we can improve and it's something that we've been focusing on a little bit more in 2017 and are doing more in 2018 are you bootstrap right yes we are oh I love that man congratulations how he resists the urge to race it's been easy actually we've we've found that once we started getting on people's radars we we are not big enough for certain types of investors and we're too big for others so we what we need less than money would be either the team that the money brings and we tend to we're just we don't really need the money yeah so we and we value we value what we have and we definitely concerned with the possibilities of major change even if that might result in much more rapid growth so what's what's that growth really worth yeah sure last few questions are before we wrap up you have two revenue streams transaction kind of fee and SAS model are they split 50/50 when you clear last 12 months revenue or is one way more significant than the other good question we've seen in the industry you know a number of different approaches to pricing with with different ecommerce platforms what we've seen what we've discovered for ourselves although we've never tried a more sort of freemium with only the transaction fees but what we've seen from others and what we've done from our own math is that without some sort of minimum fee it becomes very unworkable because just to be clear I'm not to screw that I'm just curious over the past 12 months what percent of the revenue has been from the fee versus the SAS the bulk is from the fee right oh really yeah yeah I'm forcing I'm sorry no the book is from the SAS model okay we considered a monthly fee so I was thinking fee the bulk is from the monthly fee the SAS model the we consider the transaction fee to be really just a way to make it fair icing on the case you know what we found before we had that was we would have let's put we had one user that was using 98% of our system resources and paying the same as everybody else so our costs were going up cost for all of our users were going up and it just wasn't fair so we found this to be a very equitable way it's easy to communicate now you said if the case that your SAS model is really driving most your business and the thieve thing is just really you know to be fair I mean if you got a minimum of a thousand folks and the minimum price is caught 20 bucks or around there it's fair to say guys are north of 20 grand per month but less than a hundred grand per month is that generally accurate yes that's the rich okay have you guys passed that nice million dollar per year number yet or no you think they'll happen this year possibly you think so or no uh realistically probably not okay maybe 2019 all right bread good stuff and what are you currently grow as a bootstrap company always like asking its what are you currently growing at year-over-year I'd rather not share that okay why is that is that because you're not it makes you feel not good or what well I I guess we'll just say the current growth has slowed a little bit but why not show that but like I love celebrating people like you did a bootstrapped it's not about 100% you over your growth is really not slow growth over time building business the right way I mean we need more people like you sharing that numbers of people other people feel good about it yeah well in the early days you know is there's a much higher number we we sort of plateaued a little bit and we're says picking back up so right now we're in a little bit of a weird place we've done a lot of housekeeping we're very old so right now the growth is actually very low so you live in like less than okay so less than 10 percent year-over-year yeah but your info control man I mean you're living the life yeah well and and also you know like I said it's if we're at that point where we've done a lot of housekeeping we have a solid platform now it's just a matter of yeah what are we gonna take it from here what are we gonna do to get more people knowing about what we do yeah all right let's wrap up your Brett with the famous five quick answers you're number one what is the last book that you read ooh last book was just looking at it I don't think I was in the other room I just finished one and I've already forgotten that's okay we'll leave none there number two is there a CEO your follower in your study if there's not and I I feel like a bad person for admitting that that's okay number why do you feel so bad about everything that's fine number three what's your favorite online tool for building a business for building a business i favored all my tool is follow up then yeah follow up then um it's it's a good one number four how many hours received to get every night who's seven ish that's pretty healthy and what's your situation married some like that kids married three kids and we we just my oldest just hit her 50th state travel on our way back yep on our way back down from Canada so amazing we've done we travel most of the time and Bret how old are you 37 37 very good last question real quick so you know if someone came in and offered you a million bucks for the business and nothing changed about the fish strategy obviously that's hard to believe but this is assume nothing changed would you sell the company or no no not for that exactly interesting okay good last question what do we for 20 year old self knew Oh trust trust my gut and just don't tolerate toxic people there you guys have from Bret trust your gut don't tolerate toxic people founded foxy back in it start off his foxy cart back in 2006 they processed now over 2 billion in transaction volume and while that number is impressive most the revenue actually comes from their SAS model I've got over a thousand people between a thousand and five thousand paying 20 bucks for more per month so doing between 20 grand a month and 100 grand per month 2% logo cheran per month which is really low that's actually super healthy when they tested customer acquisition in a paid model they spent about $100 customer actually north of 100 bucks joke liar customer lifetime value north of 50 months with that 2 percent sure and healthy life time I use somewhere around a grand they do their own calculations though on that with their team of 10 based remotely throughout the US and around the world Brent thank you for taking us to the top thanks so much pleasure to be with you