How Foyer Work Raised $900K at a $7M Valuation to Help Engineering Teams Measure Output (Interview with CEO Pratyush Rai)

Introduction and Company Overview

Nathan Latka

00:00Foyer.work. They're helping maximize performance of engineering teams. One design partner today paying a $100 per month. They spent about $15,000 on the MVP. Three cofounders each own 33%. They raised $900,000 in funding at a 7,000,000 valuation, though, so they've got plenty of runway to grow here as they look to onboard four to five new design paying design partners in the next three months with a team of six. Hey, folks. My guest today is Prajush Rai. He's

00:25the CEO at a company called foyer. Foyer is a team of former IIT graduates building a virtual project manager for software engineering teams. You can find them at foyer.work. Prat, Usher, are you ready to take us to the top?

Pratyush Rai

00:36>> Yep.

What Foyer Work Does for Engineering Teams

Nathan Latka

00:37Alright. So foyer helps maximize performance of engineering team is what does that mean? Can you tell me the story of a customer that's currently using you?

Pratyush Rai

00:45>> Yep. So, the the kind of problems our customers bring to us is basically they they are a small team of engineers who are, you know, trying to get a bit more process driven. Let's say, you know, a a team of about 12 or 15 odd engineers where which was not following any sort of agile or, you know, spin mythology and who are, you know, now trying to, trying to onboard in the right set of processes over

01:08>> Jira or or and use GitHub in the right way. So what we help them do is to get them the right statistics statistics over Jira and over GitHub so that, you know, they can start measuring them. And also What are those, Harish?

Nathan Latka

01:20What are those statistics? Is it number of pushes per engineer, number of lines of code written? What are those metrics?

Pratyush Rai

01:26>> So we we do not go at an individual level metrics when, things like number of lines of code are are not the right target points for us. What we focus more on is at a team level, what are some of the aggregate metrics pertaining to, you know, comments, per engineers, reviews per engineers, and, you know, some of the process driven process related metrics, like, are there any large deployments? Are there any high priority tickets which are

01:49>> delayed? And all of these are at team level, not at an individual level. So we promote a a more team level measurement as compared to an individual measurement.

Nathan Latka

01:57And what are some engineering teams paying for foyer today? What on average per month?

Pricing Model and Target Customers

Pratyush Rai

02:02>> Yep. So we we charge somewhere between 5 to $10 per developer per month. I think most of the existing tools are, like, way too expensive, and and we have heard a lot of our customers complain about that that, you know, these are not affordable for startups. Their their pricing plans are already designed keeping enterprise customers in mind, and that's why, like, we are charging what is more than we need to start ups.

Nathan Latka

02:24And what does the average team have when they sign up? Five seats, 10 seats, a 100 seats?

Pratyush Rai

02:29>> So so we are targeting anywhere between 10 to 40 seats, and and the most most set of companies we work with are somewhere about twenty, twenty five, 30 odd developers.

Nathan Latka

02:40Okay. So 20 developers at $10 a pop. They're paying you on average $200 a month, something like that? Yeah. Yeah. And put this on a timeline for us. When did you launch the business? What year?

Pratyush Rai

02:51>> So we launched our business this year. So we will launch the our product in multiple stages. We followed a very lean approach. We our first version was launched somewhere about in August. Our, you know, latest version was launched somewhere last week. So so we are, like, very, very new right now.

Current Customers and Design Partner Model

Nathan Latka

03:07That's awesome. Do you have customers yet, or are you pre revenue?

Pratyush Rai

03:10>> Yeah. We we are we are having two design partners at this point, and one of them is a paying design partner. Another is doing a trial. It's going to convert into a paying design partners.

Nathan Latka

03:21What the one the design partner, what does that mean? How much do they pay for that?

Pratyush Rai

03:25>> Yeah. So we we charge them a lower tier of from our price point. And what what does that mean is that, you know, we are going to co build our product with them. We we get to understand how they are using it. We have designed our product in a more flexible manner in order to, you know, cater to their specific needs. It's not a self serve product which is there to launch, you know, for globally for

03:46>> our customers. We we have a pipeline of three more companies whom we are approaching as design partners. So you can you can think of them as a customer, but a customer for whom we are going to, you know, sort of cater to in a much more closer way as compared to

Nathan Latka

04:01Prayush, what do they pay for that? So for you to do engineering, are they paying a thousand dollars, $5,000? What are they paying to be a design partner?

Pratyush Rai

04:08>> Yeah. Yeah. We we we charge them the lower lower tier, somewhere somewhere about $5 per per month.

Nathan Latka

04:14Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:37your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:02get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

05:23not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

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MVP Spending and Early Product Development

Nathan Latka

06:37Okay. But if you're designing something that doesn't exist, right, why are they paying per month for something that doesn't exist?

Pratyush Rai

06:45>> No. No. No. It it exists. So when we when we go to the design partners, we have a product which is ready. What we do what we do is that we iterate with them in case if there is a specific requirement, you know, some sort of customization or personalization they would require, we follow that approach. So a design partner is a partner for us which helps us build a better product, and we we are, you know,

07:04>> sort of customizing our way.

Nathan Latka

07:05So you have one paying customer, say, with 20 seats at $10 a seat. You're doing about $200 a month in revenue?

Pratyush Rai

07:11>> Yes.

Nathan Latka

07:12That's great. Okay. And how much did you spend personally building the MVP?

Pratyush Rai

07:16>> Sorry. I think I should just clarify. It should it is $5, so it's a $100 per month revenue. Yeah. And how much we spend building our MVP? I think if we if we just

Fundraising: $900K Pre-Seed Round

Pratyush Rai

07:28>> if if I'm getting the number correctly, we spent somewhere about, you know, of what 15 to $20,000 in in the last three to four odd months on the on our product part. On our company expenses, there are there have been some fixed expenses like laptops and all, but, like, otherwise, we spend a a very, very small amount of money building our MVP, almost

Nathan Latka

07:47who provided that 15,000? Was that your own money or did you raise money?

Pratyush Rai

07:51>> Oh, we we raised some money from one one VC fund in India and some angel investors.

Nathan Latka

07:56And how much did you raise?

Pratyush Rai

07:58>> We we ended up raised to the north of $900,000, somewhere to the north of that.

Nathan Latka

08:04Yep. And and why was it I mean, why couldn't you fund this with your own money so that you could preserve equity and not get diluted? So

Pratyush Rai

08:12>> so we we started off, you know, doing doing our early work as a bootstrap company, but then we realized that, you know, there there are certain very good investors in our market who are very aligned with with this vision. And and what we wanted to do was we wanted to experiment

08:32>> of our product in a much more robust way. So we thought that some capital in the bank can, you know, actually help us have that, you know, a peace of mind of of cooperating in those experimentations. And that has actually turned out very well. Our first MVP was a Google Sheet integration. Right now, our MVP is pretty pretty well designed in terms of our UI UX, and that expense we could not have made as a bootstrapped

08:54>> company because our, you know, savings together would have not.

Valuation and Equity Sold

Nathan Latka

08:56How much equity did you have to sell for the 900 k?

Pratyush Rai

09:00>> I don't think I think the final equity was somewhere between 13 or 14% or 14% odd, I think. Yeah.

Nathan Latka

09:08Four? One four, not four?

Pratyush Rai

09:10>> One four. One four.

Nathan Latka

09:11Okay. Got it. So so you sold 14%. That's seven x. So 900 times seven. What? So you raised it like a 6,000,000 valuation?

Pratyush Rai

09:20>> Yeah. Yeah. Yes. Somewhere somewhere in that range. Nearby actually 7,000,000.

Nathan Latka

09:23Okay. Almost How did you get a

09:25$7,000,000 valuation pre revenue? I mean, that's that's you're a really good storyteller.

Pratyush Rai

09:30>> Yep. I I think I think it it it depends a lot on on the market and on the on the thesis which we have of this particular product and market. Right? What matters a lot from from any, you know, pre seed standpoint is from any pre seed pitch standpoint is is are you the right team to build for this market, and is the market going to be big enough? And I think these two were aspects which

09:54>> we were able to satisfy pretty well. Mhmm.

Co-Founders and Team Structure

Nathan Latka

09:57How many co founders are there?

Pratyush Rai

09:59>> Yeah. We are three co founders. We know each other for about seven years. We have been very, very close friends.

Nathan Latka

10:04That's awesome. Did you guys just split equity evenly?

Pratyush Rai

10:07>> 33 Absolutely.

10:08>> Yes.

Nathan Latka

10:09That's very nice of you guys. No one was more important than anyone else.

Pratyush Rai

10:13>> think everyone was very important for everyone else. Now we should we look at it.

Nathan Latka

10:17Alright. So three co founders. And how many folks are on the team today?

Pratyush Rai

10:21>> We we are we three are full time, and then there are three interns who are full time interns. We will mostly go we are mostly going to work with them as full time employees very soon.

Nathan Latka

10:30So they're free interns right now? Are you paying them?

Pratyush Rai

10:32>> No. No. No. They are they are paid interns. I I believe in, you know, I do not like, you know, working for free. So, like, I I would want to pay my interns as well. We are we are currently working with paid interns.

Growth Plan: From One Customer to Many

Nathan Latka

10:43And so what's your plan to go from one customer to a thousand? How do you grow?

Pratyush Rai

10:47>> Yep. I think my plan is that we'll we'll maybe work with five or six design partners in the first, you know, three or four four months after launch, and that's what we are currently doing. After we are, you know, very sure on what is a particular wedge for our product, at that point in time, we'll, you know, start only focusing on, you know, establishing that wedge in the market and, you know, communicating that to our

11:10>> potential customers. So our plan is five to six design partners, then focus on, you know, one or two very strong wedges and and, you know, just just enter the market with those wedges.

Nathan Latka

11:21How are you gonna go find four more design partners? Where are gonna find them?

Pratyush Rai

11:24>> I think I think we already have certain potential design partners in mind. We we have we have their pipeline ready, so I don't think it's going to be a big challenge.

Nathan Latka

11:33So how many are on your waitlist right now?

Pratyush Rai

11:35>> So we are we are currently in the process of onboarding three more companies. So we are already, you know, in our going to achieve our target. There's one big one week leap. We wanted to get some US based design partners for that. Are, you know, using our college network and some, you know, friends of friends who are helping us get the introduction.

Nathan Latka

11:55Interesting. Okay. Very cool. We love your story. We're certainly rooting for you. We're out of time. Let's wrap up here with the famous five. Number one, what's your favorite book?

Pratyush Rai

12:03>> I think my favorite book is Tao Te Ching. It's a book on Taoism and written by Lao Tzu. Very small book, very insightful book.

Nathan Latka

12:13I appreciate it.

12:14Number two, is there a CEO you're following or studying?

Pratyush Rai

12:18>> I think I I really, really admire so so I I really admire Paul Graham as a investor, and I do not follow him as a CEO, but but I I think a lot of what what he talks about is very applicable as a CEO too. So I really he he has really, you know, impacted my working style as well.

Famous Five: Books, Tools, and Habits

Nathan Latka

12:37Number three, what's your favorite online tool for building foyer?

Pratyush Rai

12:42>> I think there are too many favorites. Too many favorites. I think the biggest the biggest one would be Firebase. We we are our back end works very heavily on Firebase. It it has saved us a lot of time.

Nathan Latka

12:58Yep. Number five, how many hours of sleep do you get every night?

Pratyush Rai

13:00>> Sorry. Can you repeat?

Nathan Latka

13:01And number four, how many hours of sleep do you get every night?

Pratyush Rai

13:05>> I think it ranges anywhere between five to nine hours. I I do not like compromising on sleep. So there are certain days when when I get on personal days sleep mode. But otherwise, like like today, I'm sleeping less.

Nathan Latka

13:17And what's your what's your situation? Married? Single? Kids?

Pratyush Rai

13:20>> single I'm single right now. Not married. No kids.

Nathan Latka

13:23And how old are you?

Pratyush Rai

13:25>> I'm going to turn 25 very soon.

Nathan Latka

13:2820 what?

Pratyush Rai

13:29>> 25. 25 very 25.

Lessons Learned and the YC Philosophy

Nathan Latka

13:31Okay. Last question. What's something you wish you knew five years ago when you were 20?

Pratyush Rai

13:36>> I think I think a lot of stuff related to entrepreneurship. I think I I would I would have wanted to understand the YC playbook of doing things five years ago. A lot of mistakes we did, like, you know, not not making a lean MVP and, you know, not focusing very deeply on customers, we could have avoided that. I would have wanted to focus a bit more on the on the YC, you know, philosophy of doing

Nathan Latka

14:00>> startups.

14:00Guys, there you have it. Foyer.work. They're helping maximize performance of engineering teams. One design partner today paying a $100 per month. They spent about $15,000 on the MVP. Three cofounders each own 33%. They raised $900,000 in funding at a 7,000,000 valuation, though. So they've got plenty of runway to grow here as they look to onboard four to five new design paying design partners in the next three months with a team of six. We're rooting for you.

14:24Thanks for taking us to the top.

Pratyush Rai

14:26>> Thanks, Nathan. I look forward to, you know, I look forward to more such videos, and and thanks a lot for doing this for the founders as well.

Nathan Latka

14:35You bet. Take care. One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to

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