How instarel CEO Thomas Helfrich grew to $240K revenue and 20 customers in 2022.

hey folks my guest today is thomas ai nerd self-inflicted there hell frick he's a b2b technology influencer with over 169 000 followers on linkedin he's the ceo and founder of instarail.ai and the host of the ai nerd youtube channel all right thomas your attention to the top sure let's do this thanks for having me by the way it's a pleasure to be on here 18 million downloads i want to be 18 million and one yeah i know that's awesome i i hope you get there um so instarrell i hope am i pronouncing that correct correctly okay so what came first like an ai tool to drive engagement or an ai tool to create content yeah well we came first was falling in love with the problem uh and the problem was it just takes student long to create the content engage with it and figure out a strategy that works so that was that was the first piece and then uh you back into the other parts of the technology and the things you need to go build to solve that okay and so uh help me understand what the product does today what are customers paying for yeah so they what we do is we save you time and this is how we do it so we use a bit of ai writing to a technology to help accelerate the content creation process um and that would be from the writing from the spell checking to the you know the tonality plagiarism all the things that go into creating any type of content uh we leverage a bit of automation technology and other just accelerators i'll say it that way and and uh and then you draw all humans in the loop to drive engagement and uh tonality and reality into what you're building and what you're doing so they get the content they get all the engagement um i myself you know i have 24 hours a day seven days a week coverage and all my social media accounts and you know i was like 30 hours a week in social media and i'm only there about an hour now and so that's what they get they get the ability to grow network uh you know get inbound interest in what they're doing without having to sit there endlessly and you know write content engage with it over and over so your funnel when you say like you and they right who who is the customer is it a blogger like what is your customer profile the the best for us are our startup technology companies that are uh have some type of funding and they need to get to market they need to get marketing so you know if a founder goes oh i need a higher marketing person that's when i want you to go no no no call me there's a less expensive better way to do it so for example you know we're full marketing for a number of startups but we're also fractionally there so you get you know let's say the power eight 10 person team plus all this technology but you may only use an hour a day you only may need to post a week it just depends on what you do so instead of hiring full-time people to go do this and and then loading your books up with a lot of salary costs that could have gone to product or uh sales we do all the content creation and all the engagement for you so you can actually scale at uh at real speed and we can back that up with data we've had some of your fast growing clients on sendzilla's been on the show they're on a tear and so you're automating content creation for a lot of these folks um help me understand pricing what are they paying per month on average yeah so individuals i mean you can start as low as 99 a month right for get a kick ass you know carousel post created for you or a handful other posts up there's a few thousand dollars a month um when we're doing you know full on you know nine by you know six coverage all your social media accounts you know 40 posts a month articles blogs video edit there so it can be a range for us to take on any customer we just require two things which is a goal you have to have some type of goal that you're chasing for why you need to create content and go get to market and the second's just a budget we want you to think in in terms of 12 months though over month to month because that way your mindset's right to grow you're in the mindset of i'm gonna have this fixed cost approach to marketing and you're going to get some assets built along the way and as you get more successful you can either scale up if you find some attrition in your business will help you when you scale down so you get it month to month but we need those two things you need a budget and you need you need a you need a goal if you don't have them we don't take easy thomas what's your sweet spot though i understand a range of prices but the average customer today pays how much per month yeah corporate like full-on customers pay anywhere between two and three thousand a month and then individuals are probably 500 or less oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're gonna get 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 not 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 1.2 million seed round 3.7 raised they sold 22 of their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderprath.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 all right let's jump back into the interview okay okay interesting so i mean i imagine most your revenue comes from the corporates paying two grand a month yeah it's a it's a bit of a actual split because we started doing this 99 carousel post deal where a lot of people started signing up for those because there's such there's such good content that can be leveraged on multiple social media channels we're getting a lot more of individuals just coming in saying hey make me a post or a couple of those a month and so it's decent it's uh do risking our revenue a little bit by adding more users and as we build the platform in the background and we get the technology working together um it's nice to do that value add so how many of those 99 sort of this is really your top of the funnel right how many of those 99 packages did you sell last month um we just started it but you know we've had over 100 customers on the on the platform in that range already so or in our in our company so we're only about a year into revenue to be fair um and we've grown about 20 kmrr already so great yeah so we're moving fast we're a technology company actually with a lot more revenue ahead of us than technology so we're building what we need to build to best serve the customer and allow them to get more acceleration so thomas when did you when did you write when did you launch the company what year september 2020 and by the time you through cap table lawyers and websites up it's you know march okay so 2020 and if you're doing about 20k a month today in revenue what were you doing about a year ago do you remember uh 700 okay got it so most your growth has come so how did you support the business the first 12 months when you were pre-revenue well it's uh it's just bootstrapped i mean just without the pieces we're in there just building it funding ourselves we did a friends and family around that that was one way we did it so we did uh okay we raised this like a small amount like 135k and the friends and family around and um it was enough what year was that uh 2021 okay this was last year got it 135 and how much did you sell for 135 grand uh you should actually know those metrics right we're less than three and a half percent oh wow okay that's pretty good that's pretty good um so a 135 let me just see what that is sometimes 33 got it so there's like a four million valuation something like that yeah it's it's around there yeah it's uh it was a post but i actually if i i'm i'm probably factoring in one piece of a co-founder so i think there was a post-money 2.1 million so my numbers might be off just a bit but the uh i'm also taking it to the next round where it's getting diluted a bit so my uh my mind's on the dilution path right now so you raised another round on top of the 135 we just started uh we're starting to go through our seed i'm going to call it a seed round but it's probably actually a formal pre-sea round where we're going to raise the 1 million um 5 million free money and and come in bless you excuse me all right bless you again look at that why isn't it now is a terrible time to raise why i mean you're a brave man why are you going out right now um you got to do what you got to do to come over and get the company growth right so we need to get some some full-time people lined up on the tech side and this is the one growth step that we need to do is get them hired and get a building and and then we'll see what the other rounds look like or if we're going to just go cash cow and and build it ourselves and do it from there are you profitable today um yeah but we put everything back in so i don't take anything from it because i i have uh other revenue stores so i can put everything right back into it so every time we make any dollar we put it back into more content more creation and more offerings what are how many folks are full-time on the team today i'll be about 10 people total distributed between u.s philippines and africa really interesting you mentioned you have other projects what are some of those other projects well youtube ai nerd uh channel so it's a community for founders startup uh startup founders entrepreneurs technologists nerds to it's a forum they can like uh it's a platform for them just to come and talk about themselves and do shameless plugs for their technology and talk how many subscribers on that youtube channel we just did we started that the same time we started the uh it's 4 200 right now or just under it wow we started at the same time we started the company it was a it was more of a fun thing just to duke i was missing networking because of i mean do you make to make money over there on the community i'm on latte level we're at latte level so it does monetize but i say i can get a latte a month out of it what are your other projects um well besides repairing bathrooms in the house and doing those kind of home to things those are the two things that are there but there's other projects my biggest focus right now but the youtube there's some other side things that i do from entertainment purposes for other people's podcasts but i'll leave those off those are those are for entertainment i got it and how many customers today are paying you on a monthly retainer so we're only around uh 20 customers right now total right okay 20 customers yeah about a grand each yeah and that's about the average that comes in between the corporate and there uh and we've managed the growth a bit not to do any ads or anything scaled so we can really figure out what the core is to deliver and what is most important so we're really the biggest thing is we've been trying to do a product market fit and pricing need to see who would pay and why and then what technology behind it we need to go build because we're in the business of enabling we want to build the platform right fully that you can just go do this yourself totally we don't want to be in the business of delivering services so as soon as we have platform built in vp our first customers will come on as digital's sas customers how are you getting that built i mean break that down you mentioned philippines you mentioned africa what's the what's the breakdown in terms of talent split um it's mo so we have two very good uh senior type of writers in in such in a in africa and then the philippines is the full operations between leveraging and they all use the ai technologies we use every eye writing technology on the planet right now and philippines is the other half and they where are the engineers though engineers are us-based so that's my time so yeah okay so you have a technical co-founder who's doing all the code yep i see he has 50 at the beginning or what oh no he doesn't have 50 percent he has five percent uh okay okay so you did not why that's a hard conversation how did you convince him to only take five percent uh because we both know from where we are today and what we're tomorrow we're gonna have to bring in somebody who's more technically probably inclined than him even and he'll be the manager of a big technology organization or the technology organization unless so the first driver so he's bootstrapping us to get us up ready and set up on the ecommerce level and back in what we'll need to bring in are some probably higher powered technologists that you know we're gonna we're gonna need some room for equity to give to them how many engineers do you have right now besides him we have him and then uh some on the design website so really one you have really one sort of engineer then yeah we truly are we have a in any business right there's a hacker there's a hustler and there's a there's a hipster and we got hipsters in philippines we got him as the hacker right now and me is the hustler so yeah i mean how do you i guess the question is how do you make sure you don't get stuck selling services the rest of your life what what are you doing to structure your services sales to make sure you're learning about what software product to build yeah great question my expertise being in intelligent automation is we're offering services i know that are capable of being automated by technology and it's a matter of elegantly solutioning the right technology at the right moment and then only grabbing humans in the loop when necessary and then as technology advances the humans exit the process but the most important part of any of that process is the outcome for the customer so you do need to bring a human in the loop and you will for some time for this type of tech and but the idea is we don't want to do that we want to bring the platform that brings all those things together the ai writing the engagement so what we're building is a viral engagement marketing engine that'll leverage things like nfts tokens and coins to drive fire viral engagement by participating in sharing and commenting and re-sharing and not from a contest standpoint but from like more of the golden hour so what we're going to build is the piece that you actually get rewarded as being on the install network and as your content goes better and does better you get rewarded for it and in the more times you help other people go viral and you have other people share you also get rewarded for it and that motion when you mix it with an ai recommendation engine that says hey these things are doing well they're trending these posts are this type of content is doing well and it recommends it to the actual ai engine this is go create it and the actual engine goes cool and here's the reward structure that would probably drive the best viral that little three kind of tiered cycle is what we're building to allow anybody to put their content on there and connect people and technology in the right moment sounds like a plan you have to come back on and give us an update in six months uh but for now let's wrap up here with the famous five number one favorite business book favorite business book oh man i don't know how to read that's a challenging question really all right so we'll skip that one none number two number two is there a ceo you're following or studying um i you know this this nathan lanka guy is really impressive to me no you can't say me you can't say yeah it looks so good i mean how could you not take this guy for your piece you know who i really like um i i i really like uh i'm gonna tell you groups i like ceos that i see that are out there that say things like we don't hire i like i like ceo so i don't want to pick out one because there's a few that i do i want to follow and i want to talk about but they all have this drive the culture first mentality and i'll say that's the type of co i follow and i i'll put that out there like i don't want to drop the name of the person because anyway right the bold ceos that's that works number three what's your favorite online tool for building the business oh candy all right number four how many hours i sleep to get every night i try to get seven to eight that's good in situation married single kids married with three kids ah busy guy and how old are you 46 47 last question it's 46 or 47 taking off a half of my year man just right there 46 46 okay good i want to make sure i got that right last question something you wish you knew when you were 20. something i wish i would have done when i was 20. no no something wish you knew when you were 20. oh how to be 46. that would have been great i've had this mentality man i've been i'd i'd be done guys there you have it industrial.ai they right now are manually creating content for startups right about 20 startups paying a grand a month so 20 can mrr up from 700 bucks just a year ago but he's really focused on how to automate this process there is 135 pre-seed rounded at a 2.1 million valuation now looking to raise a million on a 5 million valuation to again add automation to the platform 10 folks on the team right now only engineer as a cto but again looking to expand that team as they scale up past their first 10 customers thomas thanks for taking us to the top you rock man thank you so much one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you 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