How Gravity Sketch Grew from $300K to $1.2M Revenue with 20 Enterprise Customers and 1.5M Downloads (Interview with Co-Founder Daniela Paredes Fuentes)

Introduction and Guest Background

Nathan Latka

00:00Hey, folks. My guest today is Daniela Paredes Fuentes. She's the co founder and chief executive officer of Gravity Sketch. She's a designer bringing science, design, and engineering to propose a more natural way to communicate three d ideas. Website's gravitysketch.com. Daniela, are you ready to take us to the top?

Daniela Paredes Fuentes

00:16>> I am. I am. I'm the chief chief experience officer, but I'm sorry.

00:21>> I may have said that wrong. Chief experience officer.

Nathan Latka

00:23Now but you're also one of the co founders. Correct?

00:26>> I am.

00:26Yeah. How many co founders are are there?

Daniela Paredes Fuentes

00:28>> We are three.

Nathan Latka

00:30Three. Okay. Now, you guys nice and friendly at the beginning? You just split equity evenly at the start or what? Yeah. Ah, nice. Yeah. That's great. How'd you guys meet each other and how'd you discover this problem?

How Gravity Sketch Was Founded

Daniela Paredes Fuentes

00:41>> So we met, one of my co founders and myself studied together. So we went back to academia and started our master's degree, and that was actually where Gravity Sketch was created. So We were the people that were experiencing the pain, we're designers looking to bring three d ideas to life. We saw that there was a problem that you have an idea, have a three-dimensional idea in your head. It's kind of like really, really difficult to bring it

01:12>> out to the world, communicate it to others, and to visualize it. So we thought, why not just try to tackle this problem? And we decided to create Gravity Sketch.

Nathan Latka

01:20Very interesting. Okay. And what year was that? When did you launch?

Daniela Paredes Fuentes

01:23>> 2014. Long

Nathan Latka

01:25Alright. Time Fair enough. And and help me understand today. So when someone signs up and pays for Gravity Sketch, what do they get? Is it a is it a browser UI they can do, like, Figma but for three d?

What the Product Does and How It Works

Daniela Paredes Fuentes

01:36>> So actually, Gravity Sketch is free for everyone. Only, like, larger customers pay for it for security and so on. I mean, Sketch is secure for everyone, but they pay for extra, extra security and the services. And so, yeah, I mean, it's not, it is like Figma, but in three d, like you got it there, like in some way it's for collaboration in three d. The difference is that you need to be wearing a headset in most

02:03>> cases. So you download the app on your headset, on the app. So there's multiple different app stores where you can download the software.

Nathan Latka

02:12You're talking a VR headset?

Daniela Paredes Fuentes

02:14>> Yeah. Like the one behind you.

Nathan Latka

02:16Yeah.

Daniela Paredes Fuentes

02:17>> Yeah. So, I mean, there's multiple ones. This one is usually the one that most people have, the Quest 2. And so you go in there, there's an app store, you download it, you make your account and you just jump in and start, start sketching in gravity sketch and you can start inviting other people to join the same environment with you. In a way, it allows people to be in the same space without necessarily being in the

02:42>> same physical space.

Nathan Latka

02:43And how many free users are on the platform today?

Free User Base and Daily Active Users

Daniela Paredes Fuentes

02:47>> Today, we have 1,000,000 and a half downloads, and we have about a thousand daily active users at the moment.

Nathan Latka

02:58And what when you look at the pattern behaviors of those daily active users, what makes like, what are they doing every day? What makes your tool addictive?

Daniela Paredes Fuentes

03:07>> Yes, that's a very good question because there's multiple things that they're doing there. And addictive is, it's a good word because a lot of our users actually use that word. First of all, you jump into Gravity Sketch and you just get into this creative flow because you don't need to be worrying about, you know, a tool or like functions or perspective drawing or anything. You just go in there and start using kind of like the most natural

03:36>> ways of creation. In a way, it just allows people to really dive deep into the idea that they have in their head and try to solve it, as opposed to trying to figure out how to actually make the thing possible. So that's one thing. They jump in, they start kind of like creating geometry. That's one of the use cases. Actually, it is pretty addictive for two reasons because it's awesome to use it and really fun. Also,

04:02>> since you're immersed, you don't really see the light of the day. And so people lose the track of time quite often. We actually had to put a clock in one of the controllers, like inside

Nathan Latka

04:14the environment.

Daniela Paredes Fuentes

04:15>> That's the moment it's oh, damn. It's been like three hours that I'm still here.

Nathan Latka

04:19Oh, 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

04:43your 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

What Makes the Tool Addictive

Nathan Latka

05:07get 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

05:29not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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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06:17if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

06:43the interview. So is that what's the key usage metric for you then? Is it like number of new three d's, like sketches done per day or what's the usage metric?

Key Usage Metrics: Exports and Collaboration Sessions

Daniela Paredes Fuentes

06:51>> The usage metric that we measure most is exports. So for us, exports, and we're now starting to measure, this one is a bit of a newer one, but it's collaboration sessions with more than two people in there. And so those are kind like the two things that make people kind of like really go back to Gravity Sketch. One is finding it useful to be able to go into the platform, create something, and be able to export it

07:17>> and bring it somewhere else. That's the thing that we value the most because we don't want people to be just creating something that they're not going to be able to use in their entire workflow. That's the biggest metric that we mentioned. And then the other one is, yeah, number of people having this kind of like collaborative sessions and the duration of those sessions, because that's the other really powerful thing about gravity sketches, having a lot of

07:42>> people come in and have design reviews, presentations and just give feedback in this kind of like virtual space.

Nathan Latka

07:49And Daniela, last month, how many total exports were created on the platform?

Daniela Paredes Fuentes

07:54>> Right now, we are still kind of like in the midst of like tweaking the numbers. So, can't actually tell you that.

Nathan Latka

08:01Okay. So you're still trying to figure out to measure that?

Daniela Paredes Fuentes

08:03>> Yeah. I mean, we've already put some things together, but it's still kind of like, you know, going like this.

Pricing and Enterprise Contract Structure

Nathan Latka

08:09Okay, fair enough. Now we've talked about the sort of the freemium tool. Obviously, people switch on and turn to paid when they want extra, extra security. Help me understand what the pricing looks like. So what does the average paying company pay you per month to use Gravity Sketch?

Daniela Paredes Fuentes

08:23>> That really depends on the number of people they're going to be using it and the types of services. So it varies a lot and it's kind of like a bit of a, yeah, a confidential thing per company that we can't actually Well,

Nathan Latka

08:35don't obviously tell me the company name. I'm just asking for generally speaking, are we talking like a thousand bucks a month or like, you know, $10,000 a month or something different? What's the range?

Daniela Paredes Fuentes

08:44>> No, it's about like, that's why I'm like, varies a lot. So it's hard to like, tell.

Nathan Latka

08:52I know it varies Daniela, because you have a ton of different price points, but just, I'm trying to just get a sense of small, medium, large. Can you give me some sort of idea?

Daniela Paredes Fuentes

08:59>> We really just sell to like large organizations. We don't sell to like medium. If there's like medium companies that want to be using it, they can be using the

Nathan Latka

09:08Yeah. Sorry, Daniela. The reason I'm asking the question this way is because my audience doesn't know what your version of Medium is compared to their version of Medium. Right? So, like, are you talking like only You're only looking at $100,000 per year plus contracts or are there some people paying you for extra security at $1,000 a month?

Daniela Paredes Fuentes

09:22>> No. Yeah. Mostly it's like about, yeah, $50,000 a year to $100,000 a year contract.

Nathan Latka

09:30Yeah. I see. Okay. Got it. So that's sort of your enterprise motion. You been selling that a long time or is that a new product?

Daniela Paredes Fuentes

09:37>> We've been selling that for about three years now, a bit more.

Nathan Latka

09:42Oh, okay. So got it. So this is your main go to market strategy. Now, when did you you launched in 2014. When did you get your first paying customer? Do you remember?

Daniela Paredes Fuentes

09:50>> Yes. 2017, actually. Was a 2017.

Nathan Latka

09:54So how did you guys pay your bills between 2014 and 2017?

Daniela Paredes Fuentes

09:58>> That's a good question. Yeah, it was pretty hard for us at the beginning to pay the bills because, you know, on one side, not a lot of people had VR headsets, so we couldn't actually sell the software, and not a lot of people wanted to invest in VR companies. So for a really long time, we survived out of grants and awards and also part time jobs.

Nathan Latka

10:20I see. Okay, so when did you guys all officially join full time?

Going Full Time and Early Survival

Daniela Paredes Fuentes

10:24>> Full time was 2016, that was when we launched the app for actually people to be using it. Like the VR app before we launched an iPad app. Then in 2016, we launched the VR app and started kind like receiving a few like donations and like that, and with our savings, we were just keeping afloat until we were able to raise investment and close our first deals.

Nathan Latka

10:51Okay, so you decided to raise instead of bootstrap. When did you raise the first round of capital and about how much was that for?

Funding History: Seed Rounds and Series A

Daniela Paredes Fuentes

10:58>> It was 2018, and that was for 1,700,000.

Nathan Latka

11:03Mhmm. And where did you guys wanna invest that money?

Daniela Paredes Fuentes

11:06>> We just people. We started, like, growing the team. Yeah.

Nathan Latka

11:10Yep. And have you raised more since then?

Daniela Paredes Fuentes

11:12>> Yeah. So after that, we did a seed plus round, which was 3,200,000. And then end of last year, we were able to close a round of 33,000,000.

Nathan Latka

11:25Okay. So that seed plus round, was that also in 2018?

Daniela Paredes Fuentes

11:29>> That was 2020, beginning of the 2020.

Nathan Latka

11:342020. Interesting. Okay. So and sorry, the one that you raised last year, said was for 22,000,000?

Daniela Paredes Fuentes

11:40>> For 33,000,000.

Nathan Latka

11:41Oh, '33. Got it. Was one of my digits off. Okay. Interesting. So talk about the most recent raise. Where do you plan to invest this capital to drive some growth?

Daniela Paredes Fuentes

11:50>> We plan to invest it quite heavily on the go to market strategy. So really putting a a lot of resources in making sure that Gravity Sketch is known and its values, it's known in the industry. On top of that, making sure that our current customers are having everything that they need to be able to grow and use Gravity Sketch and see value. That's kind of like our most important focus at the moment. Along with marketing, marketing up until

How the $33M Will Be Invested

Daniela Paredes Fuentes

12:22>> now, have been doing it in a very organic way. We don't really have a marketing team so far.

Nathan Latka

12:28How many people are on the team right now full time?

Team Size and Engineering Headcount

Daniela Paredes Fuentes

12:30>> Right now, full time in the whole Gravity Sketch?

12:34Whole team. Yeah.

12:34>> 60 people.

Nathan Latka

12:36Six zero?

Daniela Paredes Fuentes

12:37>> Six zero.

Nathan Latka

12:38Yeah. How many how many of those are engineers?

Daniela Paredes Fuentes

12:41>> It keeps changing. I think on the last count, it was 18 people.

Nathan Latka

12:4818. Okay. And you guys probably do you build your own? Mean, do you have a lot of animators and designers on the team or no?

Daniela Paredes Fuentes

12:54>> We have quite a few designers. Animators, we don't. Probably in the future we will. We have quite a few designers. They have different roles, though. So like we have some designers that are actually working on the product, and we have four designers working on the product. But then we also have footwear designers and automotive designers that were actually Gravity Sketch users before joining us. Amazing. Yeah, it's pretty cool. Now they're part of the team and they're helping

13:23>> our customers get the most value out of the tool, so it's kind of interesting.

Nathan Latka

13:28Yeah. Hire your customers. That's always a great strategy. Okay. Very cool. Now, the, you know, a lot of these sort of SaaS companies that go from free to paid, it's bottoms up, right? An employee starts off on free, then six other employees join. And then before you know, the enterprise is moving to like a paid plan. Do you guys see that same pattern happening or are your enterprise users coming on and directly paying from day one

13:49with for 100 seats with extra security?

Bottom-Up Enterprise Sales Motion

Daniela Paredes Fuentes

13:52>> No, no, no. That pattern is happening all the time. Actually, all of the accounts that we have have come up from like bottom up.

Nathan Latka

13:59Oh, I see. Interesting. So your your SDR AEs team, they're basically looking at your most active free users going. There more people from that same company using Gravity Sketch? Should we talk to their CIO and give them more security features? That's how they prospect.

Daniela Paredes Fuentes

14:13>> Yeah. Exactly.

Nathan Latka

14:14Exactly. Very interesting. Have you learned anything from that process that surprised you?

Daniela Paredes Fuentes

14:19>> Well, I mean, the interesting part here is that there's normally designers that fall in love with Gravity Sketch, bring it to their workplace, and then it becomes kind of like a crazy, like navigating the corporate waters to figure out how to bring that tool into the ecosystem, which tends to be really hard. That's the part that we are looking to crack right now is like, how do you equip these people that normally don't- their job is not

14:49>> to really go and look for software, right? And so how do we help them navigate those waters in the easiest way so that you can eventually get this software serving the majority of the people in that organization.

Enterprise Customer Count and Revenue

Nathan Latka

15:03Yeah, that makes a ton of sense. All right. Before we wrap up here, said you mentioned you got, you guys went full time in 2016, got your first customer in 2017, which is a great moment. How many customers are you serving now today?

Daniela Paredes Fuentes

15:13>> Today, enterprise customers, we have 20 enterprise customers at the moment.

Nathan Latka

15:17That's nice. So it's a small group. You can really focus on them and just focus on selling them a lot of product.

Daniela Paredes Fuentes

15:23>> Yeah, exactly.

Nathan Latka

15:24All right. Fair enough. And you mentioned earlier, obviously, that you have those high ACV's usually above 50,000. So we can take 20 times 50,000. You guys are doing at least 1,000,000 in revenue at this point, correct?

Daniela Paredes Fuentes

15:36>> 1.2 last year. Yeah.

Nathan Latka

15:38Oh, wow. Congratulations. And what were you doing the year before that? Do you remember?

Daniela Paredes Fuentes

15:42>> Way less. We were at 300.

Nathan Latka

15:45300,000?

Daniela Paredes Fuentes

15:46>> Yeah. The pandemic actually helped a lot because, yeah, people needed to figure out how to bring people together in the same space without-

Nathan Latka

15:54That's remarkable. And what do you guys think you'll close this year at?

2022 Revenue Target and Accel Pitch Story

Daniela Paredes Fuentes

15:59>> We're looking to close at probably 6,000,000. So, yeah, growing that That's incredible.

Nathan Latka

16:04So you guys, I mean, listen, don't take this as a bad thing. Think it's a great thing. You're clearly really good storytellers about vision where you're headed because you raised 33,000,000 with about 1,600,000 or $2,000,000 run rate when you signed the initial term sheet, if I'm getting my timing right. So that's like a, that's a huge valuation multiplier. What did you put in your deck that made Accel go, oh my gosh, we'll give these guys $30,000,000

16:28today. They're worth it.

Daniela Paredes Fuentes

16:30>> We just put them in front of our users and they were able to just, like, sell the dream better than us.

Nathan Latka

16:35That's that's amazing. So it was a 1,500,000 install base and a thousand DAUs?

Daniela Paredes Fuentes

16:39>> Yeah. Yeah.

Nathan Latka

16:40Very interesting. Okay, Daniela. Anything I missed before we wrap up?

Daniela Paredes Fuentes

16:44>> No. No, I don't think so.

Famous Five and Wrap-Up

Nathan Latka

16:46Yeah. You Thank you so much for the bet. Alright. Let's wrap up here with the Famous Five. First one, favorite book.

Daniela Paredes Fuentes

16:52>> Wow.

16:55>> Brand Telling a Brand Story.

Nathan Latka

16:57Number two, is there a CEO you're following or studying?

Daniela Paredes Fuentes

17:01>> Not really.

Nathan Latka

17:02Okay. Number three, besides Steve Jobs.

Daniela Paredes Fuentes

17:05>> Steve

17:06>> Jobs.

Nathan Latka

17:07Okay. Number three, what's your favorite online tool for building Gravity Sketch?

Daniela Paredes Fuentes

17:11>> Unity. Well, online tool, Figma actually.

Nathan Latka

17:14Figma? Okay. Number four, how many hours of sleep do you get every night?

Daniela Paredes Fuentes

17:18>> Eight.

17:19>> Eight.

Nathan Latka

17:20That's good. And what's your situation? Married, single, kids?

Daniela Paredes Fuentes

17:22>> Married with one kid, 1.5

Nathan Latka

17:25Oh, wow. That's exciting. Alright. And do you mind me asking how old you are?

Daniela Paredes Fuentes

17:29>> Yeah. 36.

17:30>> 36. Last question.

Nathan Latka

17:31Take us back sixteen years. What's something you wish you knew when you were 20?

Daniela Paredes Fuentes

17:35>> Oh, wow. Really good question. I wish I knew that I didn't have to worry so much that I just needed to kind of like keep going, following my dreams and working hard, and things would happen.

Nathan Latka

17:49Guys, one of the first stories of someone that's launched sort of a B2B application specifically for VR, where you have to have a headset actually gaining traction. Gravity Sketch now has over 1,500,000 downloads. They've got over a thousand daily active users. Daniela's measuring activation by how many exports are happening per day. That usage and those usage metrics have enabled them to go out and raise a competitive round, 33,000,000 just raised in their series A as they

18:12look to scale past $6,000,000 in revenue this year with a team of, call it 60 people, 18 engineers to date. We're rooting for them. Daniela, thanks for taking us to the top.

Daniela Paredes Fuentes

18:20>> Thank you.

Nathan Latka

18:23One 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 watch every Thursday 1PM

18:48Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

19:10fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign

19:32up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people.

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