How Inventaprint CEO Rich Mokuolu grew to $1.2M revenue and 20 customers in 2018.

hello everyone my guest today is rich makulu his passion for venting and tinkering was ignited at an early age when he attached some wires to battery and a light bulb and lit up his childhood bedroom for the first time it also happened to be around the time he saw the movie flubber so it's safe to say his fate was totally sealed he has a patent related to the military space and was experienced and has experienced how difficult it is to get the products he'd spent years developing and prototyping actually made this led to the creation of inventoprint with his twin brother roland that's what they're working on today richard are you ready to take us to the top yes let's do it all right so what is invent to print and what is your revenue model how do you make money yeah so invent a print simply put is we apply intelligence to the hardware development process so we basically take hardware companies component specifications where they are in the product lifecycle and give them a list of vetted manufacturers that can bring those products to life our model is we're a sas plus company so we have an annual license fee that hardware companies pay us and the plus side of things is we get paid on in transaction from the manufacturers okay so let's just focus on sas for a second what's the average customer pay per year would you say yeah so the average customer is about like uh five thousand dollars per per month right per user per month or per year per month per month a month okay so let's say that i i uh have a patent on something i want to get it created i'm paying you five grand for the year and you're gonna help me find manufacturers to build my product correct so basically we we have two tiers of customers within our sas uh business model so the the within the enterprise level customers we work with innovation teams right so they would pay uh for access to the platform and basically by using a platform they get connected to better network manufacturers to help build uh their their products okay so i sign up with you today it takes me six months to pick a supplier from your network i then eight months in finally have like the first product done and then maybe 10 months and i'm starting to drive sales and let's say my little widget is now doing 10 grand a month in sales via that supplier you're taking a cut of those sales that is okay and how do you what i mean what percent are we talking so it's roughly around 10 but it's volume based okay so if i'm doing a million bucks in sales you'll take less than 10 percent correct okay and i mean how do you track that imagine once i work with a supplier you then have to basically track that my widget is being sold in target and kmart and walmart and i mean how do you actually know how many sales i'm doing so for us it's not necessarily focusing on the sales piece of it it's focusing on the friction side of things right adding value and reducing that friction of how do you actually build a product better and how do you go to market quicker with less money from a workflow from a working capital perspective um so that's what we're really focused on um the added benefit is you know people tend to have more cost competitive products um people tend to have more better well thought out ideas going to market um so this extra sales is just an added piece of it but our core focus on what we actually target is how do you apply intelligence to that hardware development process and that's your five thousand dollar kind of per month fee correct okay so sorry i don't understand then how to think about the plus part of your sas plus model you're taking person 10 of what sales of other transactions what transactions right the transaction of the hardware company with the manufacturers so think about it in this way right so you have a hardware company let's say you're the hardware company um you are trying to build a new innovative product that goes to space widget nathan's space widget nathan's correct space widgets um so you you have our our sas uh model where you pay us for the access to the platform and with each transaction we get a percent commission um similar to how you pay oh i see this is like this is like upwork or fiber so if i pay a manufacturer uh a hundred grand you're gonna take ten percent of that cut right and it just uh just disaground you on the way it works right now without a platform similar to the real estate industry how you have uh brokers real estate brokers you have manufacturing brokers in the hardware space and those people take anywhere between 15 to upwards of 25 right so what we do is by using a 10 percent we're actually undercutting the broker mac the broker market and giving a more cost competitive solution there yeah as long as your sas fee is so they have to be doing enough volume where the sas fee is marginal correct so we're mainly b2b yeah okay so like let me ask you your average customer how many dollars in a given year are they giving to manufacturers that you've connected them with or which i'm assuming it's in the millions yeah so our our our dollar profile is you know for a mid market company really determine it by a million dollars worth of spend a year and then for the enterprises over that um so that's where we kind of target the mid-market enterprise range i see so if so if nathan's space widgets is doing so well or i beat elon musk to the moon and i'm putting more than a million bucks per month or per year through the supply through the manufacturer that you connected me with uh you know i'm still paying the same flat five grand per month fee regardless of my volume but again you're taking some cut of sales that's dependent on the volume uh that is correct i i just missed the last piece of it uh that's okay i'm just trying to understand whether someone's whether someone's putting a dollar to the manufacturer or 100 million to the manufacturer they're still paying five grand a month right and the key for us is making sure that we add value outside of that transaction right so the reason why we're more of a sas company is because we give companies tools to better efficiently interact with their internal teams to where when they're transacting that's all fine and great but they already see value without transacting so they're customers that we have that even pay us regardless of transacting because we provide so much value i see without those transactions i see and how many customers have you scaled to today uh so right now we have a network of over 100 manufacturers uh we're mainly b2b we have around a little less than 20 pain pain customers but more many larger b2b 20 kind of large b2b customers and you're helping get the connected to a network of about 100 potential manufacturers um you know if i take 20 times that 5 000 price point you guys are doing north of 100 grand per month at this point is that right wow uh well thanks for backing into revenue well i mean you gave me i mean it's just multiplication not that hard i know i know it's funny i mean yeah that's accurate that yeah something like that okay and help me understand growth so take me back to november 2017 what were you doing per month back then november yeah a year ago i'm just looking year over year growth so you're doing 100 grand a month today what were you doing a year ago yeah so so for a year ago so i don't know if you know the background um but basically uh a year ago we're actually part um so my twin brother and i were part-time i just started invent a print there were part-time jobs we actually just went full-time about three months ago both of us so how little were you a year ago so we were pretty little we're probably maybe three customers and most of them were getting the the transactions like the the funding of just transactions alone okay so like are you talking like less than 10 grand a month back then correct okay very good and so uh and just to be clear so today you're over 100 grand per month so right now we have a pipeline of over 100 grand okay what are you actually doing though per month because it's so it's less than five grand a month then if you have 20 customers and you said 20 customers 500 we're yeah we're actually doing over five grand a month like our our revenues for projected okay yeah i'm trying to i don't wanna talk about projection i wanna talk about like what you've actually accomplished like actually like today the monthly recurring revenue you're doing is about how much so it's roughly five grand right now okay you're only okay so you're doing five grand per month across the entire company no no for the transactions for each customer yeah that's what i'm asking so total revenue per month right now is about what so if you were to multiply again like five grand per month by 20 that's what i did it's a hundred grand per month and you said and you said no it's around there so i'm trying to ask you what is it oh yeah so the no was about we also get offered transactions as well i know i'm sorry so just the sas model you're doing yeah yeah that's accurate you're doing 100 per month right right got it and then you're you're adding on top of that transaction fee so true or false you're doing more than 100 per month right now in revenue okay got it just wanna make sure cool and um okay so i wanna put this back on a timeline so you can tell more your story here you guys were part time a year ago so you really launched this you started tinkering in 2017 and you just started full time this year yeah that's great have you bootstrapped this or raised capital uh we booted up completely dude i love that that's great uh are you thinking about raising capital or no uh we are considering raising capital okay and why would you say yes versus no um it's a very interesting question so for us is about how fast we want to grow right um the beauty of us is we because we're a sas plus business model we tend to monetize really quickly right um so in terms of you know do we want to raise money uh is about how quickly do you want to grow and just be clear sorry you said you're bootstrapped but you've gone through tech stars so which means you raise capital right so that 120 grand okay got it so you've raised 120 grand but nothing else right okay got it so 120 grand in the company that's what's funded the growth up to this point uh zero to 100 grand per month in revenue by the way is not easy so congratulations on doing that that fast uh talk to me about churn what's your churn look like today uh no churn actually um probably that might change in the future but right now we're because we're very selective in who we work with we make sure that we can provide value to the people that we're onboarding that's great so with no kind of revenue churn that must mean your net revenue retention kind of month over month is above 100 because you're probably driving expansion revenue or the transaction fees is that accurate right right how far above 100 percent of just the sas how far above 100 so i'm not willing they're comfortable with giving more numbers than that like we retired we try to keep private things private okay now that's fine i'm not going to push you on things you don't want to disclose but you disclose 20 customers and 5 000 rpoo so i'm just i'm only using information you gave me yeah yeah no absolutely absolutely and and just to be clear you just said you have no churn which means net revenue retention has to be higher than 100 correct okay cool yeah again i'm just in terms of so yeah i'm just saying like in terms of specifics i'm not comfortable with going into specifics around numbers but i'm glad to talk about generalities sure i i don't have a general podcast i like to be very specific right because a lot of people can throw out general stuff and by the way i think of a compelling story so i want to make sure i feature that story how it should be featured um so net revenue retention uh north of 100 at this point you haven't turned any customers does that mean you're too cheap uh i i think right now that's a really great question you know i think for us the things we're struggling with internally in terms of pricing is are we leaving money on the table in terms of value right are we capturing all the value that there is to capture right now the customers that use us the reason why there's no churn because we actually represent our case study show roughly averaging 75 in cost reductions so constantly saving a ton of money using us um just because they're used to paying brokers 20 25 right no not even just on the broker's fees so when we talk about why are our our approach to things and really talking about intelligence is we look at your design intent or manufactures in our network located design intent and they offer feedback so a case studies and nanotechnology company came to us it had a 50 000 injection molded part design and as part of the bidding process manufacturers in our network not offer not only offer a price but they also offer feedback on your design intent right so in this case i said hey fifty thousand dollars is going to take over three months to build we can actually do this exact same geometry and sheet metal and we can deliver this in less than two weeks and it's gonna cost less than two thousand dollars right so our ethos as a company is is really not about being the quote unquote uber manufacturing it's really about how do you empower companies to make smart decisions with their working capital right so you're making smart decisions where you're not spending that fifty thousand dollars you're spending less than two thousand dollars right and you're not waiting three months you're you're having things done in less than two weeks right so if if that client was to go to anyone else they would gladly take the fifty thousand dollars and maybe up charge them to 70 000 to get their gmv higher right um but it really doesn't serve that customer totally understand cost savings makes a lot of sense here um we're running out of time it fill up the team for me how many team members today so four team members right now four yeah including you and your brother yeah so we have one one full-time software engineer and we just onboarded one last week and where is everybody based so we're all based around the northeast uh between new york and connecticut right now okay very good it's kind of remote northeast area and then last question on customer acquisition uh when you look at like fully weighted cac is it too early to look at that do you not really you have a good sense of what that is yet or no so yeah i think because we're growing mainly from word of mouth i'll say it's still too early yeah well i mean obviously if you're doing sales you'd include your salary and stuff like that but yeah it's definitely it's definitely a very small kind of cohort size but again healthy growth in a short amount of time congrats on that um let's uh let's wrap up here rich with the famous five number one what's your favorite business book oh gosh uh the lean startup by eric reese number two is there a ceo you're following or studying uh jeff bezos uh number uh number three what's your favorite online tool for building your business favorite online tool for building business uh hubspot uh number four how many hours a sleep ticket every night uh sleep is a luxury but uh i'll say on average i tried to shoot for at least five okay good and what's your situation married single kiddos uh just got engaged actually weeks ago congrats that's exciting no kids no kids all right and how old are you uh 29. okay last question rich what do you wish your 20 year old self knew uh more patience uh embrace the suck guys there you have it embrace the suck or as ben horowitz said and uh in his book hard thing about hard things uh if you're gonna eat don't nibble uh there we have it there we have it from rich founder of the company back in 2017 invent a print again helping folks like me right or anyone that has an idea they want to get manufactured helps them save money they charge a fee call it five grand per month to 20 of these uh producers right now they then pair them up with one of their hundred manufacturing partners they've worked with and take about ten percent of the total kind of fees that go through that platform uh they've scaled to about a hundred grand per month in revenue fairly quickly on just 120 grand in funding from tech stars too early to talk about churn and cac and things like that but they got a team of four people up in the northeast as they look to scale rich thanks for taking us to the top thank you