Karmabot Revenue (2024)

hello everyone my guest today is coolish he is building a company called karmabot.chat if you want to check it out he grew up in the far eastern part of siberia studied computer science and nuclear physics played in a band got excited by the indie games making and left uni to become a digital designer check i mean that is the hell of a bio for several years in the early uh 2000s he's been working remotely traveling and blogging extensively before that becoming a popular sort of mainstream thing and then ended up in new zealand today building karmabot sasha ready to take us to the top yeah yeah hi um i'm stars you just made the introduction i'm jealous if people are watching this video they see this big beautiful mountain you're sitting in front of you're in new zealand right now are you going skiing later today oh well i i tricked you it's chilly actually i'm in santiago south america and uh yeah this trip is about to be over we're going to london next week still on the move still on the move so what is your life like i mean you're you basically are building this slack tool which we'll get into in a second but how many like how frequently are you moving locations well this particular year uh we have a child so it's not really that often we change the locations but this year was supposed to be the big adventure and we got into this and then covet happened uh so now it's a bit of an emergency situation trying to get back home but still trying to keep it funky london seems to be good and home is london right hello the home is new zealand uh we live in new zealand okay guys why why why won't new zealand let you back in college they they they they so they want and then they very very very difficult uh with uh in re returning back is really not that simple interesting okay so tell everyone what does karma bot do and what's the revenue model is it sas yeah it is um it's a subscription model based on the use uh what it does it actually provides teams with within chats mainly uh with the ways to phrase and uh share some appreciation and show some recognition between peers so this was done before obviously on the web but not on chats and what we built is growing from chats back to the web probably from from slightly like you you say chats chat's like slack and then it's growing to the web is that what you said slack and microsoft teams and actually telegram but we have several chats we focused on this in chat uh interface when people typing stuff and this is this isn't you this is a new component to this appreciation field but what do you mean when you say you're growing from chat to the web well uh it means that when expedia comes to buy this uh tool they are saying yes we installed this slack and it's really really cool but not all of our employees are using chats and do you have a web panel now that we can use with the login and password and stuff we don't have it yet and we want to get there but that field is crowded so we're basically approaching the problem that already exists but from the different angle from the angle of interface typing chart i see okay that makes sense and how much revenue are you guys doing today well just yesterday hit a 200k annual revenue so that means 17 000 a month congratulations that's exciting how many customers uh that would be 233 paying teams which translates in approximately 20 000 active users so 20 and how do you define an active user well they send karma then they send these appreciation points to each other that means that they are using the system and what is that so again for people not familiar with your system describe what karma is explain how it works right okay let's say uh you did something great for me at work and i instead of just saying thanks or uh putting a reaction to this line of text that you shared with the team um i'm actually producing this kind of animated card that is being published on the public channel now everybody knows that i'm showing my appreciation of your work publicly and they may be also not aware of the stuff that we're working on now they have bigger visibility within the team all sorts of perks all sorts of girls yep okay so good so this makes sense 233 people the perks are growing uh you just passed two hundred thousand dollars in ar which is seventeen thousand dollars per month where were you a year ago in terms of revenue uh 64 65k a year so three times less so we're growing three times a year since we started that's great have you bootstrapped or raised bootstrap uh we've got some minor minor angel investment but any plans to raise capital uh we feel that we may look into the direction it takes time and it's it's time taken from the product building that's my main concern because we are very small and trying to stay lean it's actually difficult to raise so maybe later this year in order to get faster to the web version we'll we'll do the fundraising again yeah what's the what's the least amount of capital that if you had it right now it would make your life way easier in terms of expanding faster i think um 400 to 500k would be fine uh and that would go mainly into the like explaining what we do now that's like the marketing bit which is part partly sales and also expanding to the web we need more resources to handle it but how much equity do you think you'd have to sell to raise 500 000 um that would be up to 10 percent 10 yeah got it got it so you would you essentially would say okay i think i'm worth about 4.5 million pre-money raised 500 grand 5 million post on a 200 000 ar company yeah yeah the angel investment was based on their five million cap so we want to stay reasonable within this range i believe i said well i'm a founder i really trust that this project is gonna go well so i believe it went up but we've covered around 5 mil yeah i just wonder i hate seeing founders giving up equity the most dilutive round for most founders there's two times it's when you agree with your co-founder how much you're gonna split and the second is your like your first round of funding like this one i just wonder if there's a way for you to get some capital without getting so much delusion well that would be great obviously and to this day we've been very uh careful about this that's why all the equity is still with us apart from the angel uh tiny portion i would scale with you if you go to founderpath.com sas founders are taking money from that site super fast i mean i would i would do something depending on your metrics like 50 grand now and then if you want another 50 grand in three months and another 50 grand three months after that i would do a deal like that with you yeah we could try that uh i've checked out the website by the way i have an account there and it looks great yeah i just say be honest you don't have to you don't have to say nice things just because you're on my podcast you looked at the rates i mean what do you think uh the site looks great uh it's mainly about our data the data that we provided it's kind of messy because you have everything from our stripe account and the early days they were messy we use this account for other transactions it's not 100 and it would be great to have a way of editing this data i know that you don't really want your founders to edit this kind of uh information but to make it cleaner to clean it up somehow so it's actually more representative of the true picture yeah our platform is yeah because of how you did sort of annual plans are things not accurate but yeah the way the system works is you connect your stripe we then give you a credit score and then try and get you money fast but i can because i built the tool i can override it so um so uh we we should we should you know keep me in mind there that's something i would definitely do with you because i think this is an interesting tool but i will tell you this i tried to install it the other day and have our community manager start using in our slack group it's so difficult to figure out like how to get it started because there's the tech piece of installing you as an application inside slack but then there's the emotional piece there's a psychological piece of what are the rewards and how do you tell your community about it we totally understand that and we work uh i mean just late earlier today i did two demos yesterday four demos we speak to customers and it they need to do so much work in order to make it happen for their team but then it becomes their thing we don't we're not trying this is how we're different we're not trying to sell the pre-existing system that we claim is successful we're allowing people to use this tool to build their system and that takes time and it's difficult and then i mean we're happy to help and this is partially what we want to do with the fundraising money this would be actually you can totally see how we can spend that and uh explaining people how to the best practices how other companies did that this takes time to just convey the message you know i do no i agree with you what's how many folks are on the team today uh just six people and uh i think i mentioned before it's it's they come and go permanently we have just four including two founders so how many engineers again are you all engineers uh no not all my co-founder he's more of a business administrator finances kind of person and then uh we have designers on the team and two developers one full-time and myself i'm like in the middle of it i can code i can do that design and how do you i mean when you look at your last 12 months of history i mean how do you think about churn what was your what's your annual revenue turn monthly or or annually um annually i think it's four percent uh but that's that's just again about the comment i guess i call it covet churn which is a made-up turn but this is kind of relevant these days we see um high turn up to three to five percent but actually annually or monthly monthly uh the five percent we got last uh month that was monthly but just because of companies dying out literally they're not there anymore and so the good thing about it the ones who survived and who subscribed now i think they are the survivalists and they will be staying there for longer yeah i mean sauce i'm not revealing any private information here because you came on our deal our new shark tank for sass show on youtube and shared this but i was shocked before covid uh even during copenhagen but shocked how low your turn was i mean you were under one percent revenue churn per month and then you saw a little spike to like three point eight percent during covet but that'll come back and i panicked it's a good thing to panic about but also be realistic on you know yeah yeah yeah so it's not too bad it's not too bad and this is just to support my claim that this is a habitual thing when it's established it's there it's really hard difficult to pull out of the studio company culture how are you how are you signing up new customers and and what do you think your cac is right now well uh we don't spend anything on marketing just because we don't have anything um xp or anything extra so they come to us through the stores slack has its own app store marketplace microsoft teams has own uh marketplace and they just come organically and we're trying to handle this flow with my co-founder doing demos and the rest is just a self-service how many new demos are you doing per month oh i do seven to ten a week so that's forty one hundred hundred yeah you're doing four you're doing 40 of 40 a month basically yeah about that and how many of those convert to a trial i think the demos um that i do personally and we do one-on-one they convert like 10 um but there are still people who just register they just looking around this is two percent so how many trials do you add per month across the whole company uh you recall it it was um 1200 now it's back to normal 6 700. so 700 new trials per month and then how many of those typically convert to yeah got it got it so 10 would be seven so two percent would be they would get like between like or sorry 7d so you're getting like 20 to 30 new customers per month yeah that's a box ride yeah saying and what do you know that you have to get a customer to do like in the first week that they use you to drastically increase the likelihood that they pay or stick they need to first they need to send karma uh that's like the first metric we want uh worked on and that's why we have this uh onboarding and stuff you went through that so sending karma is the item one and setting your company values for the rewards like taking it one step further the system provides you with the ways of like uh company values show you how you uh use karma and three words give you something back for this karma so it's like uh the next derivative out of this and you have i mean when i look at your seo what kind of world you have sort of an okay domain rate of 50 but you're not getting a lot of organic traffic right now from search why have you not invested more in search um in a way we are we have invested that the rate is low uh based on i mean it depends what you're looking at uh there is a term karma bought and we completely occupied that if you ask i mean obviously those dots that's your company name like there is it had it existed before we started this company it existed already it existed on generally on the internet people are still looking for this and when they look for this kind of product which means basically points given for appreciation by itself so that's us and um in terms of seo i'm happy with that uh we can obviously improve it always so i guess my point is though karma bottom looking at your ahrefs account right now karmabot and karma spacebot you rank number one for both those keyword combinations together they drive you about 50 clicks per month so it's it's just it's a drop in the bucket it's not a ton there are others like microsoft rewards bot which there's way more traffic potential there but you rank number 16 for those things like why not double down under like slack rewards bought and microsoft rewards bought and get those to the number one rank that's that's a great question we will we may be uh that's just one of those things you cannot double down with everything uh yeah yeah it's a valid point that's a fair and i mean that's a fair answer um and then help me understand so in the slack community uh i'm looking at the karoap page right now i mean you you've got it installed here they they don't have i don't think they don't have like a review sort of process do they you mean reviews by the customers or review in order to get the customer okay we get the customer reviews we gather at uh g2 website so g2.com if we search for karma what if there will be a page with a brilliantly shiny review um set and um yeah they they don't have it once like have you done anything with slack to try and get like their staff to add karmabot to like the staff picks list i imagine that would drive you a lot of leads if they did that they would uh but they have another product which they are big friends with and that was one of those things like we going head to head who is it it's like it's a disco disco boat uh grove previously so they were they are in essentials they are on the front page we cannot like ask we i asked actually it's like to to to put karma next to them but it was counterintuitive they invested money in this they are part of the slack fund oh yeah so we are still featured in the new and noteworthy um we are not on the last position in the particular area that's why we still getting people from the store but to be honest it gets crowded that's why we need to get out of chats in general and uh get a bigger chunk of the markets through the web are you profitable today yeah yeah we've been profitable since january as i said we're keeping this very lean very good all right let's wrap up here with the famous five number one favorite business book favorite business i really like big blitz scaling um you're part of that of course no i would say i think i have it on my on my bookshelf somewhere uh i just read it it was a good book uh number two is there a ceo you're following or studying is there a ceo you're following or studying uh not really no uh we're trying to stay indie and uh be this indie development kind of studio nothing to do so that you sound like a a young jason freed yeah probably yeah yeah all right number three what's your favorite online tool for building your company favorite the lion soul um we like stripe okay number four how many hours of sleep do you get every night seven eight hours okay and you said married with one kid right yeah yeah how old are you seven years how old are you toss i'm 38 38 last question what do you wish your 20 year old self knew um consistency is more important than just i know fun karmabot.chat guys enabling teams to reward teammates when they do nice things right now starting in slack and microsoft teams they just passed 200 000 bucks in ar they've got 233 customers paying on average 70 80 bucks a month that's how they've grown uh company launched uh stats when did you launch the company two years ago two and a half years ago 2018 was a company launched it again scaling nicely today bootstrap basically and profitable might raise 500 grand at a 5 million valuation later this year early next to expand to a web-based version thanks for taking us to the top thanks a lot thank you for the opportunity