How Instarel Reached $240K ARR With 20 Customers on a 10-Person Team (Interview with CEO Thomas Helfrich)

Introduction: Thomas Helfrich and Instarel

Nathan Latka

00:00Hey, folks. My guest today is Thomas, AI nerd, self inflicted there, Helfrich. He's a b two b technology influencer with over 169,000 followers on LinkedIn. He's the CEO and founder of instarel.ai and the host of the AI nerd YouTube channel. Alright. Thomas, you ready to take us to the top?

Thomas Helfrich

00:15>> Sure. Let's do this. Thanks for having me, by way. It's it's a pleasure to be on here. 18,000,000 downloads. I wanna be 18,000,000 to one.

Nathan Latka

00:21Yeah. I know. That's awesome. I I hope you get there. So Instarel, hope am I pronouncing that correct correctly? Okay. You are. So what came first? Like, an AI tool to drive engagement or an AI tool to create content?

Falling in Love With the Problem

Thomas Helfrich

00:33>> Yeah. Well, what came first was falling in love with the problem. And the problem was it just takes too 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, you back into the other parts of the technology and the things you need to go build to solve that.

What the Product Does Today

Nathan Latka

00:51Okay. And so, help me understand what the product does today. What are customers paying for?

Thomas Helfrich

00:55>> Yeah. So they what we

Nathan Latka

00:56do is we we

Thomas Helfrich

00:57>> save you time, and 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. And that'd 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. We leverage a bit of automation technology and other just accelerators, I'll say it that way. And then you draw humans in the

01:20>> loop to drive engagement and tonality and reality into what you're building and what you're doing. So they get the content, they get all the engagement. I myself, you know, I I have twenty four hours a day, seven days a week coverage in all my social media accounts. And, you know, I I was, like, thirty hours a week in social media, and I'm I'm only there about an hour now. And so that's what they get. They get

01:39>> the ability to grow, network, 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.

Nathan Latka

01:49So your funnel, when you say like you and they, right, who who is the customer? Is it is it a blogger? Like, what is your customer profile?

Target Customer Profile

Thomas Helfrich

01:56>> The the best for us are our startup technology companies that are have some type of funding and they need to get to market, they need to get marketing. So, you know, if founder goes, oh, I need to hire a 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

02:16>> fractionally there. So you get, you know, let's say the power of eight, ten person team plus all this technology, but you may only need us an hour a day. You only may need a post a week. It 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 sales, we we

02:33>> do all the content creation and all the engagement for you so you can actually scale at at at real And

Pricing and Package Structure

Nathan Latka

02:40we can back that up with data. We've had some of your fast growing clients on. Sendzilla has been on the show. They're on a tear, and so you're automating content creation for a lot of these folks. Help me understand pricing. What are they paying per month on average?

Thomas Helfrich

02:51>> Yeah. So individuals, I mean, can start as low as $99 a month, right, for get a a kick ass, you know, carousel post created for you or a handful of other posts. Up to as a few thousand dollars a month 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, and there. So it it can be a

03:12>> 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 is just a budget. We want you to think in in terms of twelve months, though, over month to month because that way your mindset's right to grow. You're you're in the mindset of, I'm gonna have

03:29>> this fixed cost approach to marketing, and you're gonna 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, we'll 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 these accounts.

Nathan Latka

03:45Thomas, what's your sweet spot though? I understand you have a range of prices, but what the average customer today pays, how much per month?

Thomas Helfrich

03:50>> Yeah. Corporate, like, full on customers paying anywhere between 2 and 3,000 a month, and then individuals are probably $500 or less.

Nathan Latka

03:58Oh, 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

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06:21the interview. Okay. Okay. Interesting. So, I mean, I imagine most of your revenue comes from the corporates paying $2,000 a month.

Thomas Helfrich

06:27>> Yeah. It's a bit it's a bit of a actual split because we started doing this $99 carousel post deal where a lot of people have 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 de risking our revenue a

06:45>> little bit by adding more users. And as we build the platform in the background and and we get the technology working together, it's it's nice to do that value add.

Nathan Latka

06:52So how 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?

Revenue Growth and Company Stage

Thomas Helfrich

06:59>> 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, and we've grown about $20k MRR already. So we're moving, 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

07:19>> best serve the customer and allow them to do more acceleration.

Nathan Latka

07:23So Thomas, when did you launch the company? What year?

Thomas Helfrich

07:26>> September 2020. And by the time, you you threw cap table lawyers and websites up, it's, you know, March. Okay.

Nathan Latka

07:33So so 2020, and if you're doing about 20 k a month today in revenue, what were you doing about a year ago? Do you remember?

Thomas Helfrich

07:39>> $700.

Nathan Latka

07:40Okay. Got it. So most of your growth has come so how did you support the business the first twelve months when you were pre revenue?

Funding: Friends and Family Round

Thomas Helfrich

07:45>> Well, it's a it it just bootstrapped. I mean, just with the the pieces. We're in there just building it, funding ourselves. We did a friends and family round. That that was one way we did it. So we did Okay. Raised us like a small amount, like a $135k in the friends and family round, and it was enough to

Nathan Latka

07:59close year was that?

Thomas Helfrich

08:01>> 2021.

Nathan Latka

08:02Okay. This was last year. Got it. So a 135. And how much did you sell for that $135k?

Thomas Helfrich

08:07>> Usually, I should know those metrics. Right? We're less than three and a half percent.

Nathan Latka

08:11Oh, wow. Okay. That's pretty good. That's pretty good. So $135k. Let me just see what that is. Is it times 33? Got it. So there's like a like a 4,000,000 valuation, something like that.

Thomas Helfrich

08:19>> Yeah. It's it's around there. Yeah. It's a there was a post money. Actually, if if I I mean, I'm I'm probably factoring one piece of of a cofounder. So I think there was a post money 2,100,000, so my my numbers might be off just a bit. But the I see. I'm I'm also taking it to the next round where where it's getting diluted a bit. So my my mind's on the dilution path right now.

Nathan Latka

08:39So you raised another round on top of the $1.35?

Thomas Helfrich

08:41>> We just started we're starting to go through our seed. I I'm gonna just call it a seed round. It's probably actually a formal pre seed round where we're gonna raise the $1,000,000 at a $5,000,000 pre money and and come in. Bless you.

Nathan Latka

08:53Excuse me. Alright.

Thomas Helfrich

08:54>> Bless you again. Look at that.

Nathan Latka

08:56Why is now is a terrible time to raise. Why are I mean, you're a brave man. Why are you going out right now?

Thomas Helfrich

09:01>> You gotta do what you gotta do to come over and and get the company growth. Right? So we need to get some some full time people lined up on the tech side, and and this is the one growth step that we need to do is get them hired and get them building. And and then we'll see what the other rounds look like or if we're gonna just go cash cow and and build it ourselves and do

Nathan Latka

09:18>> it from there.

09:18Are you profitable today?

Profitability and Reinvestment

Thomas Helfrich

09:20>> Yeah. But we put everything back in. So I don't take anything from it because I I I have other revenue source 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 and more offerings.

Nathan Latka

09:31What are how many folks are full time on the team today?

Team Size and Distribution

Thomas Helfrich

09:34>> We have about 10 people total distributed between US, Philippines, and Africa.

Nathan Latka

09:38Really interesting. You mentioned you have other projects. What are some of those other projects?

Thomas Helfrich

09:41>> Well, YouTube, AI nerd channel. So it's a community for founders, startup startup founders, entrepreneurs, technologists, nerds to it it's a forum. They can like, or it's it's a platform for them just to come and talk about themselves and do shameless plugs for their technology and talk

Nathan Latka

09:59How many subscribers on that YouTube channel?

Thomas Helfrich

10:01>> We just did we started that the same time we started the it's 4,200 right now or just under it. Oh, wow. Okay. We started at the same time we started the company. It was a it was more of a fun thing just to do because I was missing networking because of

Nathan Latka

10:13I mean, do you make do make money over there on the community?

Thomas Helfrich

10:15>> 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.

Nathan Latka

10:20What are your other projects?

Thomas Helfrich

10:23>> Well, besides repairing bathrooms in the house and doing those kinda home two things, those are the two things that are that are

Nathan Latka

10:29I there. See.

Thomas Helfrich

10:30>> But you're mainly you're mainly instarel.ai then. I mean, that's your

10:33>> main instarel.ai is my my biggest focus right now. Then but the YouTube and there's some other side things that I do for entertainment purposes for other people's podcasts, but I'll leave those off. Those are those are for entertainment.

Customer Count and Retainer Model

Nathan Latka

10:44Got it. And how how many customers today are paying you on a monthly retainer?

Thomas Helfrich

10:48>> So we're only around 20 customers right now in total right now.

Nathan Latka

10:51Okay. 20 customers.

Thomas Helfrich

10:52>> Yeah. That's a grand each.

10:53>> Yep. And that's about the average that comes in between the corporate and there. And we've managed the growth a bit not to do any ads or get anything scaled so we can really figure out what the core is to deliver and what is most important. So we're we're really the the biggest thing is we've been trying to do a product market fit and and pricing need to see who would pay and why, and then what technology

Growth Strategy: Organic and Product-Market Fit

Thomas Helfrich

11:12>> behind it we need to go build. Because we're the business of enabling we wanna build the platform, right, fully that you can just go do this yourselves. Totally. Totally. We don't wanna be in the business of delivering services. So as soon as we have platform built MVP, our first customers will come on as digital SaaS customers.

Nathan Latka

11:27How are you getting that built? I mean, break that down. You mentioned Philippines. You mentioned Africa.

Thomas Helfrich

11:31>> What's the

Nathan Latka

11:31what's the breakdown in terms of talent split?

Thomas Helfrich

11:33>> It's more so we have two very good senior type of writers in in such in in Africa. And then The Philippines is the full operations between leveraging. And they all use the AI technologies. We use every AI writing technology on the planet right now, and Philippines is the other half.

Engineering Team and Technical Co-Founder

Nathan Latka

11:47They Where are the engineers, though?

Thomas Helfrich

11:49>> Engineers are US based. So that's my Oh. So yep.

Nathan Latka

11:53Okay. So you have a technical cofounder who's

Thomas Helfrich

11:54>> doing all the code.

11:55>> Yep. Yeah. I see.

Nathan Latka

11:56He has 50% at the beginning or what?

Thomas Helfrich

11:59>> Oh, no. No. He doesn't have 50%. He has five Oh,

Nathan Latka

12:03okay. Okay. So you did not why that's a hard conversation. How'd you convince him to only take 5%?

Thomas Helfrich

12:08>> 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 or the technology organization and less so the first driver. So he's bootstrapping us to get us up ready and set up on the ecommerce level and back end. What we'll need to bring in are some probably higher powered technologists

12:28>> that that, you know, he we're gonna we're gonna need some room for equity to give to them.

Nathan Latka

12:33How many engineers do you have right now besides him?

Thomas Helfrich

12:35>> We have him and then some on the design website on the other one.

Nathan Latka

12:39You have really one sort of engineer then.

Thomas Helfrich

12:41>> Yeah. Truly 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 as the hustler. So

Nathan Latka

12:50I Yeah. 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?

Path From Services to SaaS Platform

Thomas Helfrich

13:01>> 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 just 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

13:22>> a human in the loop, and you will for some time for this type of tech. And but the idea is we don't wanna do that. We wanna 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 a viral engagement by participating in sharing and commenting and resharing. And not from a contest standpoint,

13:43>> but from, like, more of the golden hour. So what we're gonna build is the piece that you actually get rewarded as being on the Instarel network. As your content goes better and does better, you get rewarded for it. And then 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

14:02>> doing well. They're trending. They're these posts are this type of content's 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 cycles is what we're building to allow anybody to put their content on there and connect people and technology in the right moment.

Nathan Latka

14:19Sounds like a plan.

Thomas Helfrich

14:20>> You have

Nathan Latka

14:20to come back on and give us an update in six months. But for now, let's wrap up here with the famous five. Number one, favorite business book.

Thomas Helfrich

14:27>> Favorite business book. Oh, man. I don't know how to read. That's challenging a question, really.

Nathan Latka

14:33Alright. So we'll skip that one.

Thomas Helfrich

14:34>> None.

Nathan Latka

14:35Number number two, is there a CEO you're following or studying?

Thomas Helfrich

14:39>> I you know, this this Nathan Latka guy is really impressive to me.

Nathan Latka

14:42No. You can't say me. You can't say me.

Thomas Helfrich

14:44>> Anthony looks so good. I mean, how could you not take this guy for your views? You know what I really like? I I I really like

14:52>> I'm gonna tell you groups. I I like CEOs that I see that are out there that say things like, we don't hire assholes. I like I like CEOs. So I don't wanna pick out one, because there's a few that I do I I wanna follow and I wanna talk about, but they all have this drive the culture first mentality. And I'll say that's the type of CEO I follow. And I I'll I'll put that out there.

15:11>> Like, I don't wanna drop the name of the person because, you know, it it just Great. The poll old CEOs.

15:15>> That's how that works.

Nathan Latka

15:16Number three, what's your favorite online tool for building the business?

Thomas Helfrich

15:19>> Oh, Calendly.

Nathan Latka

15:21Calendly. Alright. Number four, how many hours of sleep do you get every night?

Thomas Helfrich

15:24>> I try to get seven to eight.

Nathan Latka

15:26That's good.

Thomas Helfrich

15:27>> And situation, married, single, kids?

15:29>> Married with three kids.

Nathan Latka

15:31Ah, busy guy. And how old are you?

Thomas Helfrich

15:33>> 46.

Nathan Latka

15:3447. Last question.

Thomas Helfrich

15:36>> 46 or 47?

15:37>> Taking off a half of my year, man. Just right there. 46.

Nathan Latka

15:4046. Okay. Good. Wanna make sure I got that right. Last question. Something you wish you knew when you were 20.

Thomas Helfrich

15:45>> Something I wish I would have done when I was 20?

Nathan Latka

15:47No. No. Something you wish you knew when you were 20.

Thomas Helfrich

15:50>> Oh, how to be 46. That would have been great if I had this mentality. Man, I've been I'd I'd be done.

Nathan Latka

15:58As there you have it, instarel.ai. They right now are manually creating content for startups. Right? About 20 startups paying a grand a month. So $20k MRR up from $700 just a year ago. But he's really focused on how to automate this process. There is a $135k pre-seed round at a $2,100,000 valuation. Now looking to raise a million on a 5,000,000 valuation to again add automation to the platform. 10 folks on the team

16:19right now, the only engineer is his cofounder, but again, looking to expand that team as they scale up past their first 10 customers. Thomas, thanks for taking us to the top.

Thomas Helfrich

16:26>> You rock, man. Thank you so much.

Nathan Latka

16:30One 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

16:55Central. 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

17:17fundraise, a big sale, a big profitability statement or 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 up

17:39for 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, I do it so that we can all learn. We have to counter those people. We got

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