How Invisiblecollector CEO Pedro Mendes grew Invisiblecollector to $540K revenue and 15 customers in 2018.

hello everyone my guest today is pedro mendez he's an intrepid entrepreneur explorer and video gamer he's been in the startup world for 10 years having co-founded four projects and had two successful exits mostly in the b2b space his passion for collective sports and traveling has given him a broad perspective of the world which uses to daily guide his business towards success hopefully he's currently working on invisiblecollector.com pedro are you ready to take us to the top okay all right um so tell us about the company what's the company do and how do you make money okay so um we're dealing in a new commodity which is um uh debt uh what we do we help companies get their money back faster uh 76 of the money transacted worldwide is now based on credits and we found out a good space to work is that companies don't really structure that well how they perform their receivables so we come up with an idea have a cloud system that absorbs everything that must be uh paid on a given date but it's not and we structure an ai based interaction system with those kinds of customers to stimulate their their payment okay so this is like if someone owes company x who's your customer a thousand bucks a month and they miss the payment on the first of the month you're going to reach out to the customer and say hey don't forget to pay exactly uh exactly um but then the text that we apply how and when we do it really depends on what our algorithm determines uh sometimes we can even uh work on a preemptive stage so saying like in a couple of days you will have this to pay so please prepare your payment because we're not going to be nice if you default on this or it's in your best interest to don't default on us uh things things things like that and the system also supports a b testing meaning that on some cases on the same kind of customer it can try to be more or less aggressive and see what works better um so are these are these just like what kinds of payments are these typically like payments owed to banks or payments people paying for software companies or what um of course mostly we're working with um payments that people owe to let's say ut abilities some some some loans on banks as well uh but mostly it's water bills electricity uh internet connections uh and so on though there are some corporate debts like uh hospital invoices including both uh the b2b side and the b2c side of of the business uh for instance the surgery um means that i'll have to issue two kinds of invoices one for the insurance company with most of the value that is going to be paid and then the other part goes to the patient so um it's if it's if there's money involved the system may come in yep very good okay so walk me through like on average what are one of these utilities companies pay you kind of per year to use your technology uh so uh we charge uh the new model um comprises uh a monthly fee that covers up basically the whole process and we unlock features as more um as the the monthly fee gets gets higher so it ranges from 90 to 5000. uh an average utility company pays us um three 4k a month okay so you think 3000 bucks per month is a fair average across your entire customer base um for for the customer base we have right now it's the average price they're paying about 3 000. yeah okay and and put this on a timeline for me when did you launch the company what year uh so we launched the company early 2016 on january and then we did uh development together with our initial test customers for about a year a year a couple of months is more and we released the first commercial version november last year so we've been live for over a year now over a year now steadily growing on on the receivables we're we're collecting and how many customers have you scaled to um right now we have about 15 corporates one specific yeah uh spread across three large uh accounts so we're working closely with professional credit collection companies um that basically work as both resellers and partners because well if the debt doesn't get paid they also do the the manual follow-ups if required so pedro you've got 15 customers paying about three grand per month shooting about 45 grand a month right now on revenue yes okay and where were you exactly a year ago uh well um none we we had we had a little side business but uh basically none uh basically none and how did you get these first 15 customers which growth channel did you use um well we did a lot of uh linkedin connections uh and direct sales um let's hold on let's let's focus on one of those so let's go down linkedin for a second so you log on to linkedin and what do you do to land a customer well we searched uh we tried to find a couple of uh relevant decision makers on the type of companies that we were after which were cfos and i.t managers um basically those those two kinds of uh of of individuals within within the the company within what kind of company utility companies utility companies and professional credit collectors and professional credit collectors uh we found our space against the second set and we use a strategy of trying to reach them and get a few personal meetings to say let's explore how you are you are performing your collections right now um they were open to that and when we went to the meeting say you're doing this probably in this way how about trying this after letting them describe their process and basically is how we got them to sign up for how do you how do you get their email in the first place what's the initial reach out look like uh well we do a connection uh we do a connection uh we do um two three line uh presentation on the linkedin connection and we asked them for the email and people have been receptive to what's the two or three lines you use in the first outreach um basically you want to get your money faster please reach us we have an online ai based system to revolutionize or uh to ramp up your collection process interesting and have you so over the past two years i mean have you scaled this company bootstrapped or have you raised capital uh bootstraps so right right now we are we are we are trying to to raise capital because uh how much are you trying to raise uh more than about half a million half a million dollars and in an ideal world are you gonna do this kind of as convertible debt or as equity as equity equity so what valuation are you hoping to get uh well we have a four million uh investment project for three to five years for this initial round about a million and a half i didn't understand that so you're raising right now at a four million pre-money yeah no that's so early you cut out there so you're raising 500 grand on a 1.5 million dollar pre-money evaluation yes yes okay see so you're selling about 25 of the company um around that yes yeah um do you have a lead yet yes we have a couple of interesting uh interested investors in in in the project has anyone actually set the term sheet and committed to over five you know over 250 000 bucks of the 500 um we we uh we have two proposals on the table from from spain uh from spain um i cannot still disclose their names but one is a corporate investment fund and another is is actually a business angel that works in the fintech space that's great what's the team size today how many people uh six uh soon to be 10. yep so are you i imagine you're burning capital right now right so uh i i missed are you burning capital right now reach your last question uh no are we already profitable okay you're pro you're prof so the 45 grand a month you're making more than covers your 10 salaries and office and all your other expenses no more than yes it does so what we're looking is that as i've said in the beginning our sales are mostly based on direct channels and we would like to shift that to the online channel and nobody in the team has the expertise to do that in an efficient way so we would be spending a lot of money uh probably no results so the investor is to fund basically the ai project that we're undergoing and uh really spreading the word that this exists on on the 911 perspective yeah and where's everybody based what's the location so basically right now we're we're in porto porto portugal we we um but then again um our investors may lead us to spain and we are also part of the vodafone powerlabs startup program here in portugal which may lead us to use any of the offices that vodafone has got it so portugal and spain six of you guys talk to me about churn have you lost any customers yet uh right now we still haven't lost any okay so just too early yes in terms of uh in terms of your customer acquisition cost do you know what that is yet or is it too early it's it's it's it's too early it would be too high yeah very good all right pedro let's uh let's wrap up here with the famous five number one what's your favorite business book favorites business favorite business book um [Music] there are a couple uh there are a couple uh there are a couple well the official libra success guide this one the official what ah got it okay number two is there a ceo you're following or studying right now uh sitting in there for microsoft um number three what's your favorite online tool fair well google number uh number four how many hours of sleep to get every night uh four and what's your situation married single kids uh single okay not married no...