Kontentino Revenue (2024)

[00:00] Founders, what's going on? You guys know I love in person events and they are back. The recording you're about to hear is from our most recent event where we had hundreds of founders come together, share intimate details, templates, KPIs, OKRs about their business, and it was something special, something special. We'd love to meet you in person. If you want to see the next live events we have coming up via our schedule. The link will be down [00:23] below in the description. If you're listening on iTunes, check this out on YouTube, you'll see the links in the description. Or you can just Google Founderpath or Latka next event. We'd love to see you in person. In the meantime though, enjoy this recording. It's a good one. [00:37] >> So hello everyone. My name is Bo, and I'm the CEO of a social media tool called Kontentino. But before I tell you about the mistakes I did along the way, there's a lot of bootstrappers here. Right? But what about the VC backed companies? Any any funded companies here? Please raise your hand. Okay. Not so many, but still. So, yeah, this is going to be a story about, me, trying to get to over €2,000,000, while bootstrapping. [01:11] >> But I think that the funded companies can get some insights out of it as well. [01:18] >> So so what do we do in Kontentino? We are social media management tool tailored for advertising agencies and brands, and we are helping them to streamline their work flow, collaboration, approvals, etcetera, etcetera. So imagine Asana and Hootsuite having a baby. That's what we do. But also, what I'm really grateful about that almost from the day one, we always cared about what's going on around us in the world. And and we've been always supporting NGOs and organizations [01:51] >> along the way. And and just most recently, we've we've discussed this Ukraine situation, but Ukraine is actually a neighboring country of Slovakia. That's where we are based. So so a week ago, I've actually been on Slovak Ukrainian border volunteering and helping out, and it's it's a sad thing to see. And what I wanna say by this is that we are all successful here, and I believe that every single business should support a greater cost. It doesn't [02:22] >> need to be right now about Ukraine. It's it's about the world we live in. And I think that with a little help, if you support financially or whatever way, people or organizations making this world a little better, I think that's it's gonna be great. So I just encourage you to do that because that was out of our minds from from the very beginning when starting the company. But let's get back to business then. I'm really happy [02:48] >> that we've got recognized by, for example, Forbes 30 under 30. We've got it enlist. We've been the fastest growing tech company in Slovakia, two years in a row, and top 10 in Central Europe and Eastern Europe. And we've got over 7,000 agencies and brands using our tool worldwide. [03:07] >> So, but can you tell me what is wrong with this graph? This is our revenue growth. What do you think? What is wrong with that? [03:20] >> Okay. But but I heard that. You you said it. Right? It's linear. It's linear. Yeah. It it's linear. It we we were trying to bend the curve for quite some time, and we were not really successful by doing that. But I'm gonna tell you why. Three reasons why we were not able to to really bend it. So in the next twenty minutes, I'll tell you why you shouldn't play it safe and how we accumulated almost $700,000 [03:51] >> in cash and profits, even though that was not our plan. Then, the second thing is that the hiring challenges. I think that everyone is having hiring challenges, and it was a huge challenge for us because we had no idea who to hire when, and that's one of the mistakes I did. And then maturing up the organization. We've been very punk ish, early stage like organization for over five years, and we had to mature up we should [04:20] >> mature up much earlier and much sooner than we actually did. So don't play it safe. [04:30] >> This is our customer acquisition cost before 2019, 350 US dollars, quite okay. But what happened is that right now we have 1,100 customer acquisition cost. So why this happened? [04:47] >> 90% of our customers came from Facebook ads before 2019. The problem with it was working beautifully for us. We were running conversion campaigns, so we were basically getting clients all around the globe. You know, we don't we didn't see the borders there. And it was working beautifully. The problem there is that it was not scalable. The more money you invested in the Facebook ads, the higher the customer acquisition cost. And then the Cambridge Analytica scandal, happened, [05:15] >> so they changed the algorithms, changed the attribution modeling and all of that. And all of a sudden, you know, it was not working for us anymore. We drained out this channel. This was the only acquisition channel we were investing in, and we were basically betting on just one one bucket, one number. So what what happened just recently, we found out, and before I before I said this, after 2019, we were living some like in a vacuum. [05:44] >> We had no idea where to invest. We were not sure if we're gonna do Google Ads, if we're gonna do search engine optimization, if we're gonna do referrals. We we had no idea. We were afraid to invest in any of these channels. We were playing with it, but we couldn't really track it properly. But just most recently, we fixed our our attribution model, we find out that 60% of our current customers came from word-of-mouth. This was [06:11] >> not our intention. [06:14] >> But we realized that two years ago, we actually started to transforming our organization from customer success into product led growth. We started to invest in the product marketing. We started to invest in in referrals, etcetera, etcetera. So the word-of-mouth was not our intention, but it happened to be because all the activities we made. [06:37] >> So what happened since we were so scared and we were not sure where to invest money, we accumulated a lot of cash. And then we decided, okay, we gotta grow much more aggressively. You know, one more thing I'll tell you, we have quite a good churn rate. We have below 2% revenue monthly churn rate. So the churn was not a problem when you take a look take a look at the at the growth. So what do [07:05] >> we need to do? We need to create a very important mind shift. Before that, I think that Rami said that they've got a very poor financial planning, but we didn't have any financial planning before. So so we didn't have any budgetings, any forecasting, nothing like that. It was more like, hey, Bo, can we spend couple thousand dollars for this activity and we are expecting this kind of ROI from it? Usually, I said yes because those those [07:35] >> asks for the budget were like couple thousand dollars. Everyone was afraid to ask like 10,000, $100,000 for the budget. And it was just be because we didn't do any proper budgeting and financial planning. So last year, six months ago, we sit down with our account manager not account man he's not even he's starting to be a good CFO, but he is he is a junior person. He is our he's doing the bookings, and we crunched the [08:02] >> numbers. We actually took a look at every single team, their expenses, their activities, and their initiatives, and we put their numbers. And when we've seen those numbers, all of a sudden we gained a confidence. All of a sudden we've seen that, okay, this is how much we are spending for each initiative, and we actually thought that, we can spend $100,000 $200,000 for activities and initiatives which had a blurred result. Like, of the activities you just no, [08:33] >> no, don't know how they're gonna turn out. They might be risky. And so, we gained this confidence, and all of sudden we see that, okay, we gotta do it much more aggressively. And it was just because we crunched the numbers, and it was very, very deep dive. You can see here that, okay, this is just based on the teams, but it's it goes much deeper. By the way, speaking of the transformation from customer success organization to [08:58] >> product led growth organization, you can see the blue, what is it, the blue stack, that's the budget for the customer success. So you can see that we are transforming, we are not increasing the budget for such activities. So, the the second mistake, what we did, is, you know, we were always company of juniors. This is actually a CV from one of our early employees. She was a freshly graduated marketeer, zero experience. And, you know, these kind [09:34] >> of people were the people we really enjoyed to work with. They were passionate, freshly graduated, and talented, I guess. But but they were they've got this grind. They've got this drive. [09:46] >> So the passionate people can help you start. They can help you build the foundation, the base, build the culture. But all of sudden, when you have 15 people who are all juniors with zero experience, you got yourself into a problem because you are spending hundreds and hundreds of hours investing into those people, guiding them, supervising them, trying to unlock the talent. And, you know, it's it's not what you should do. So so this was again something [10:16] >> we realized that, okay, we need to hire experienced people. Why we didn't hire experienced people before? Because we were afraid. We they were three times more expensive than the junior people, and we couldn't really justify the cost. We didn't know that the ROI of such such roles will will be justifiable. However, we did that, and then we realized that the experienced people, you just give them the OKRs, the goals, the rocks, whatever management methodology you use, [10:46] >> and they will just report to you. They will bring results immediately. That's the big difference, one of the biggest differences between having the junior's passionate people and experienced folks. [10:58] >> The second mistake I did when it comes to people management, I wasted two years with a junior led leadership. It sounds harsh, but it is what it is. And I'm gonna tell you a story about our CTO. Kontentino actually started in advertising agency, and they hired me to actually commercialize the business to to to build the business. So at the beginning, there was just me and one software developer. Then later on, we hired two more software [11:27] >> developers. And naturally, the first software developer became a CTO. The CTO was was very talented, great software developer, but he didn't have what it takes to be a good leader, a good CTO. He didn't have the strategic mindset about things. He he didn't really understand the the scalability for technology and stuff like that. And we spent year trying to get him to where he where he needed to be, but it didn't didn't work out. He was [11:55] >> frustrated for for all of us. And at the end, he almost left the company as a bad leaver. [12:02] >> So after that, after he left, of course, we we hired experienced CTO, and he was a game changer. He came there, and he identified the problems. This is actually a picture when he was when we were drawing the architecture of our software solution, and we were identifying what parts of the code no one ever touched before other than the leaving CTO. So it was challenging, but it it brought it through it. And the team, even the [12:30] >> team got more motivated because of the the leadership. The second mistake I did is a story of our CMO. It's a copy paste story. It's the same mistake. She was the first girl in marketing, very talented, very passionate. She was great marketeer. All of a sudden, got seven employees in the team. And, again, we paid a lot of consultants for her, a lot of coaches. We spent a lot of time on her to get her to [12:58] >> be good leader and strategist, but she didn't get what it takes. But luckily, even though we were both very frustrated, she said, like, okay. I this is not for me. She left the company. We hired a new CMO. And, again, a game changer. The point here is that people usually think in organization that the only way how they can grow in your organization is vertically. So when they are three years in your company, they're expecting that [13:25] >> they will be team leaders and managers. You know, it doesn't have to be that way. People can also grow horizontally. They can become subject matter experts. They can become like internal consultants in your company. And and this is actually still happening. We are, right now, we are hiring a head of customer success and a senior customer success manager. She raised her hand like, hey, I wanna apply for that position. I think that it I got all [13:54] >> what it takes. We sit down with her, and we very openly and transparently talk through that, that we don't think that she's got what it takes. She's a great customer success manager, but she's missing a certain soft skills which are very hard to learn or gain. Same thing happened with a head of marketing. When we were hiring one, we've got a growth manager, he raised her hand. I wanna be a head of marketing. And again, it's [14:17] >> a completely different job to be a head of marketing and being a growth manager. And the good thing is that they understood, and they are super happy. They are still with us. They are bringing a lot of impact to the company. They grew they are growing horizontally, and and they are happy. If we would try to push them immediately to the to the to the leadership role, it might it might end up very, very sad. [14:43] >> So, the third mistake, maturing up the organization. For five years, we've been very punkish. We you know, the only mature thing we did was OKRs. And even though we implemented the OKRs, we didn't implement it very well, so it was not really working for us. Right now, it's working. So, we were we were very, very punk ish. [15:08] >> But what we had to do when we realized, like, we gotta invest more heavily into growth, we gotta hire more people as well, so we created this playbook. Like, we grew actually our FTE headcount from 18 to 45 in nine months. And this is what we did. We did a very simple SWOT analysis of each team. We just needed to understand what's working, what's not. Let's just identify the things we need to change, or we need [15:33] >> to keep. Then we have to define the roles and responsibilities in each team, if they make sense or not, or if we are missing some roles. And actually, with the roles you are missing in each team, the senior management will help. When they will come, they will identify, like, okay, these are the roles we are missing in a team. We gotta hire them. And once you identify the roles you need, you gotta hire the talent acquisition [16:00] >> specialist. Actually, I hired 20 people myself, and it's time consuming. Know? It's great when you're hiring from the beginning because you are building the base, the the early employees, the building the culture, and you should still be in in the hiring process, but you shouldn't be this doing the screening calls, etcetera. So so hire the talent acquisition specialist as soon as you can. And the last thing, very important, we were always hiring roles which had a [16:29] >> direct impact on the revenue. We always thought that, okay, we need to have people who will bring the new MRR or retain the MRR. But we haven't realized that, okay, we need to have people like back office managers, like HR people, like project managers, the people who lubricate the engine, who actually help the engine to run. And this was a very important mind shift with it. [16:54] >> And hire yourself a COO. So 80% of my time I was spending was in the organization. I was doing actually the COO kind of tasks for the past six years. And in order to be a CEO and think about the big picture, the big strategy, and creating the partnerships, you need to free up your hands. And you need someone who will run the organization for you. And I'm super lucky because I found my COO. Actually, she's [17:24] >> here. Her name is Hannah. [17:28] >> And she started as she was one of the first employees in Kontentino. She started as a customer success manager, then she became head of customer success. So she grew vertically. It's happening. Right? And now she's becoming the COO because she was the natural leader. Her team was beautifully working, and and and you know, COO is someone who is working with you on daily base on daily basis. It's like your second partner. So if you are lucky [17:57] >> enough, and you have someone in your company who've got the traits of becoming the COO, and you you click and you understand, and you, like, complement your skill sets, you gotta you gotta find this this person in your in your company. Because I think that hiring a COO from the outside works, but I found it kind of very hard, and you need to be fortunate to find someone who you would click immediately, that you would feel [18:24] >> that, okay, this the partner I want to work with. [18:30] >> And this is important. One call, it's all what it takes to make a good decision. You know, sometimes it takes a while to make a good decision, not because you don't know what the good decision is, but because you are afraid to make a good decision, because you are not sure. And sometimes you need an approval of that decision from someone else. And this is this is an email. We've got an introduction to one experienced CTO, [18:56] >> because we've got this challenge. Our development was slow and delayed for six to nine months. We were supposed to release some features, and we were just super late and our customers were still begging us like, what's up? You told us it's going to be in August, but it's December. So we knew about this problem, but we didn't know what to solve it. So we hop on a call with this, experienced CTO, Ethienne. We talked with him [19:19] >> and he immediately told us like, hey, guys, you've got this completely wrong. You've got to hire a project manager, experienced project manager. You've got to switch from waterfall to scrum and agile, and it's gonna solve your problem. So that's what we did. And it was just one hour call. We wouldn't come up with it. I mean, we've got several options. This was not a breakthrough idea. We were thinking about it, that this might be a solution [19:45] >> for that, but we didn't do it. [19:49] >> So and now we are thinking, okay. We've got all these changes, how it impacted the the MRR. We were pushing on the new gross MRR forever, and it always looked the same, like q one, q two, q three. For the past two years, it looked like that. We started hiring processes, started implementing all the changes in q two and in q three, and within a quarter, we could already see the result. And in q one, which [20:17] >> is just right now happening, the q one is going to be even better than the q four. So one quarter after implementing all the changes, being more aggressive in in, in the financing, being more aggressive in investment, hiring the right people, we already could see, the difference in the MRR. [20:36] >> With that being said, there's one disadvantage, I believe, what all bootstrappers have. We are kind of like a lonely wolf. You know? We don't have any experienced board of directors. Sometimes we don't have many people we could talk with. And and and this is, comparing to VC, like like, with my friends who are having companies, which are VC backed. When they found the right investor, which they click, you know, smart money, we we've heard it several [21:03] >> times, you know, these are the people who can guide you, who can supervise you, who who you can have a chat with, and who can challenge you. This is what the bootstrappers are missing in a day to day basis. So in order to solve this, you gotta build your network ASAP. You gotta find the right people. You gotta find the experienced people who have been in your shoes already, who experience your situation. And this way, you [21:28] >> basically can have the chat, and they can guide you and tell you and identify, this is what you should do, or give you the approval. Yes, you are making the right decision. Do it straight away. So build your network as soon as possible. With that being said, we are actually trying to not trying, but we are actually building an advisory board. We are looking for anyone who is experienced enough to help us to to grow and [21:52] >> scale the business. So if you are or if you know any advisers, coaches, mentors, whoever who is excited about this one, just, yeah, ping me and let's have a chat. I would love to I would love to know get to know if we can find something work workable. [22:11] >> So just to sum it up, [22:14] >> don't be safe. You are in recurring revenue business. If you crunch the numbers, you can step on the gas pedal, and you shouldn't be really worried about. Just crunch the numbers, don't play it safe, and invest heavily into growth. Passionate people are great from the beginning. Don't be afraid to hire the experience. I know they are super expensive, but they will bring results. And the last thing, mature up the organization. You know it's fun to be [22:45] >> a startup. You've it's fun to be creative and and do it everything like punk way, but the better system you put, the sooner you will see the results of the well working system. So that's it. Thank you so much, and and I hope to chat with you. Thank you, Bo. We actually have a few moments now that we can run back some time. Is there any questions that you guys wanna ask Bo before we switch? [23:13] Bo, you guys ever thinking about raising, or is it bootstrap fully? [23:17] >> We are thinking about raising, but we wanna get to 4 to 5,000,000 as soon as possible. Then we start to be interesting for for VCs, which are interesting for us as well. So that's our first milestone, 4 to 5,000,000 ARR. [23:32] >> Well, one more final round of applause for Bo. Thank you. Thank you.

Introduction hello everyone my guest today is beau pak stuffel he is studying innovation management and marketing in denmark and in the us after his studies he was invited to launch a social media tool and developed a leading ad agency in central europe in less than four years he and his team have built a tool with more than 4 000 brands and agencies on board such as ikea bbdo and v m l he's on the forbes 30 under 30 list and became founder of the year in slovakia in 2019 with his company contentino bo you ready to take us to the top yes let's do that all right so everyone wants to know what is condentino what do you guys do so we we are social media tool uh which helps marketing teams advertising agencies and brands uh to collaborate and plan social media content so we are like uh buffer and asana would have a baby yep i love that analogy buffer and son have a baby okay and when did you launch the company uh march 2016 uh it was the official launch uh but before that we've got some mvps ready uh it's based it was basically a spin-off of an internal it was an internal tool of one of the leading central european advertising agencies and let's start with where you are today and then go Monthly recurring revenue capture your story so today what is monthly recurring revenue uh it's 110 000 euros 110 000 euros okay and where were you exactly a year ago do you remember it's a very good question uh it was about 80. okay got it got it so 110 000 euros is the equivalent of about 130 000 us dollars uh up from you know 93 000 us dollars about a year ago so so healthy growth um walk me through i mean why are people signing up for this how are you how are you getting new customers monthly today uh it's through various channels i mean we have 360 approach uh it's basically performance marketing we started to focus on search engine optimization past year uh and and that's actually a good question it's actually a challenge uh right now to acquire uh new new customers i'll just give you a second i'm gonna i'm gonna check out my phone take your time and worries [Music] the beauty of live interviews that's how it works folks exactly that's how it works it's worse than when you're in theater then yeah it's no problem so same awkward moment so you're doing 120 000 a month right now which is about a 1.5 million dollar run rate have you done this all bootstrapped Bootstrapped yes yes oh wow bootstrap still profitable we love that how profitable how much to the bottom line each month uh each month well now it where bear eyes we were on a roller coaster in past few months but but right now in the bank we have uh around 200 000 euros okay so how do you as a founder how do you decide how to invest that capital do you pay it out to you and your team as dividends do you reinvest it what do you do uh we reinvest and right now we let it sit uh we were kind of cautious because the corona virus situation was kind of challenging and there were a couple of months we where we had a negative growth rate uh so we were kind of played we played it safe and right now we prepared several things and several modules we are planning to launch and for that we're gonna just boost it and boost it and boost it we started to folk we're trying to focus more on ads paid ads uh on social media and let's see how that will pay off but how many how many Currently serving 950 customers construction how many customers do you currently have bo uh it's nine it's over 900 950 accounts uh but with that one account there can be several agencies or several brands so what does that mean the average customer's paying you like 130 140 a month yes exactly yeah interesting take me back to the 2016 launch how did you get your first 100 customers [Music] just knocking on doors i mean we were we were lucky that we started that started from the advertising agency they got a lot of connections in slovakia and czech republic basically uh we had already some case studies ready with the clients of the agency and we just went door-to-door and showing them the product explaining the value the unique selling points and we've got our first early adopters and we've been in touch with them ever since was this your own agency did you own the agency no the agency is on the market for over i think over 15 years and i just got invited to try to sell and launch this product constantino so how did you spend it how did you spin it out of the agency without the agency taking a bunch of equity i'm sorry how did you spend the product in the code out of the agency without the agency taking a bunch of equity you still have a bunch of equity it's still a majority like okay so more than 50 it's more than 50 yes do you regret anything about that to be honest we are supposed to have a negotiation and discussion regarding this topic uh within a few months so let's see how that goes but of course it's uh it's a tough topic especially my focus is my my company basically and unhappiness of my employees and of my clients uh so we'll see how that talk will go yeah how many uh how many folks are on your team today uh 17 working internally in-house and another 15 people is working externally so they are usually service providers okay and how many engineers six hiring another two okay and any quota carrying sales reps or no uh we don't we don't have we have one hunter uh hiring second one and most of our sales are basically far more so we have more like customer success team who are qualifying incoming leads incoming registrations and then i see working with them so no quota though no no since our our average revenue per account is kind of low we've been trying to do cold sale but not worth it it makes it tricky at this price point to churn can also be an issue what is your gross revenue churn per month uh gross revenue churn i'm not sure if i gonna have this one but our monthly turn rate is uh 1.5 past three months the average is 2.5 this year uh we've got seven percent monthly churn rate in april that was kind of tough but they got back they yeah they reactivated for a few months so you're doing something like 18 to 25 annual churn uh obviously covet was a little blip but do you beau do you have an obvious way to drive expansion revenue or no uh expansion revenue anything to your customers after they initially sign up or no on average we have a thousand euros mrr uh every month you have one uh thousand euros each month on upsells oh okay got it got it so you're that's like that's like you know 15 to 20 percent expansion revenue annually so your net revenue retention is something like 100 percent yeah yeah that sounds right yeah interesting you mentioned testing paid spend walk me through that i mean do you have a good barometer on in terms of what your customer acquisition cost is today Customer acquisition cost to get a new 130 a month account yes that's that that's a tricky uh we started in january february we still kept it on the cag was 350 euros and right now it's over 700 euros so we more than double um the expense uh on cac uh we're trying to solve this i mean there have been a lot of changes on the market um the advertising agency world uh shattered into pieces uh many of the big bigger agencies or bigger clients we see the trend that they are having smaller teams or the brands are just laying off the agencies and they are trying to do everything in-house so the teams are much much smaller and uh we think that this might affect also the cac and also the average sales price that we are having right now yep you're going through a fun time we're rooting for you when your equity negotiation comes up in the meantime they'll let's wrap up with the famous five number one what's your favorite business book uh well right now i i i still think that's a predictably rational from then a really it's it's still all the fun i always go back to that book number two is there a ceo you're following or studying [Music] uh right now tom or tim kaiser the new uh hootsuite ceo i really i'm really observing this this gentleman what he's going to do would you would you sell to sweden if they want to buy you depends uh but i admire what hootsuite is doing and it would be a fun fun merch yeah if you're if your equity negotiation in a month or so doesn't go well and you guys decide you and the agents that you want to sell the company right would you would you look at taking sort of offers in the in the sort of three to five million dollar range so it's about you know two and a half to four x your current arr i mean it sounds reasonable yeah i haven't thought about you so you wouldn't sell even if you get no more equity it really depends this is i i i would like to keep keep it uh more private yeah i mean again the the value of the show is sort of trying to bring these issues out right because everyone goes through these everybody but no one wants to talk about them so i'll respect your request not to push harder there i think you've already given us a lot of good stuff to learn from so number three uh what's your favorite online tool to build content you know i really love intercom even though i'm kind of mad on them from time to time i think that they are trying to really make make a wider approach in forgetting about the niche yeah and pipe drive we are implementing pipedrive right now i'm really excited about that number four how many hours of sleep are you getting every night eight and situation married single kids single okay and uh how old are you 29 29 last question what's something you wishing when you were 20 i wish i knew i think that i wish i knew that it's not about ideas it's all about execution guys there you have it contentino doing about 93 000 a month a year ago now doing over 128 000 a month or about a 1.5 million dollar run rate they have over 950 customers 200 000 cash in the bank so he's ready to make investments and double down on growth team size is 17 full-time 15 contractors six full-time engineers but scaling they've got 18 percent annual revenue churn and another 18 of expansion so 100 net revenue retention spending 750 bucks to get a new 138 a month customer so about a six month payback period there bo we're rooting for you man thanks for taking us to the top thank you so much it was pleasure 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 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 sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something 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 sas 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 for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 but i do it so that we can all learn we have to counter those people we 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just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is beau poxtafl he is he studied innovation management marketing in denmark and in the us then after his studies was invited to launch a social media tool developed in a leading ad agency in central europe to the market in under four years he and his team built a tool with more than four thousand brands and agencies on board such as ikea bbdo and v or v m l the company is called contentino it is social media management tool for marketing teams bo you're ready to take us to the top yes let's do that all right so give us an update last time you were on was again about a year ago at this point so tell us what the company does if people miss that episode sure uh content you know basically is a social media tool uh which helps uh to collaborate and approve created content it's basically like a santa and hootsuite would have a baby okay perfect so are you still playing like the average customers are they still paying about 100 bucks a month what's the arpu uh the rpu is uh slightly higher it's 115. uh we are working on this we are planning actually to increase our rpu uh next year we are changing our pricing models uh just trying to monetize why why why do you want to change your pricing model uh we figured out that uh our plans uh have quite a big um barriers when you want to grow your team so our pricing model currently is based on users and there are quite a big jumps like 10 20 and 30. and uh 10 20 or 30 what seats or price point seats seats price per se so basically there is a there is a plan from up to 10 users there's a plan up to 20 users there's a plan up to 30 users and we figured out that it's quite a barrier for them to upgrade to higher plants so we created something like a middle plants like plus plants and it became quite popular uh so so the customers start to grow with us and now we figured out that okay we are going to launch uh several different add-ons into product uh so we are going to basically create two plans which are going to basic and premium but you are going to be able to uh choose if you want to have 10 15 20 25 users so basically the jumps on users are going to be smaller and uh you can basically easier grow so what will you upsell again so if it's not going to be number of seats are you it's going to be feature based up selling or usage based up selling or what they're basically two axis one is a feature-based upsell so basically if you if you are very advanced advertising agency or very advanced social media team you will need to have this pro plan uh but but secondly the upsell is based also based on lowering the barrier of adding more seats into into control what's the most effective feature that you have on your expensive plan that people upgrade for i would say it's uh it's called content-based it's for managing multinational brands so so the brands have control over uh the brand across multiple countries i would say that's that's the best premium feature we have and where are you today i know you launched the company in 2016 how many customers are you serving today we have over 700 paid accounts but in those accounts there's over four 000 brands and agencies okay so so basically what does that mean so basically there's five or six brands per customer or agencies it depends okay so 700 customers across kind of 4 000 agencies or brands and they're paying 115 bucks a month on average i mean can i back into your you just passed a million bucks an ar or you're about to within two weeks i hope so within two weeks we're waiting for that that's good champagne is in the fridge so well that's good because about a year ago about a year ago you were you were half the size right about 40 000 a month in revenue correct yeah that's correct i mean to be honest uh this year uh was not the greatest when it comes to scaling and growing we had much more ambitious plans but what we realized we've been basically stabilizing the company so we hired 10 more people from 7 to 17 we've been setting up processes we've been setting up for example objectives and key results so we became much more mature companies not this punk style we've been and uh basically kind of slow down the scaling what we have planned so 17 people how many engineers uh five sixes the sixth one is coming soon okay and how many do you have any quota carrying sales reps uh yeah we we have a quite a large customer success team uh we don't do outbound sale we have uh more like onboarding team and customer support and customer success and that's uh how many have how many have quota though how many like quota reps uh what what do we mean by that well they're there's their they are paid based off a commission base plus commission they get a percent of every all the sales they bring in uh well how we are uh paying our customers sales uh our customer care reps is basically that uh we have plus mrr every single month right nets plus mrr and based on that every single uh customer sales or customer success rep will get some kind of percentage from that so they have fixed uh based on their seniorities depends how senior they are what is the level and then basically every single one will get the same portion of uh because you know the net mri is very important for us because we are focusing more on monetization uh retention and all of that and if only one side we are getting a lot of new clients but on the other side they are churning it's also their responsibility so we don't want to so are you paying them based off of new customer editions or upsells only it's all combined it's it's net plus mr basically it's turn downgrade upgrade uh newly acquired it's all combined and at the end you've got an item interesting and so what does that look like those seven reps if you'll say hey our goal for next month is to have 6k and net new mr if you hit it everyone gets 100 bonus it's it's much more it's much more than a hundred dollar bonus well how do you get to whatever the bonus is it a percent of something or it's a it's about it's about we have some kind of uh uh goals how much money certain uh seniority level reps should earn and it's always about 40 to 50 from from the salary so basically you have you have uh let's say just an example thousand euros a month uh that's your goal and you are getting 40 percent uh that's the commission uh percentage per commission so add it all up go let's move away from talking about individual sales reps but all together next month what do you want your net new mrr to be what's your target uh our target is about actually you said it right it's about 67 000 euros okay and of that 67 if you hit that what percent you'll pay out about 40 of the 7 000 out in commissions oh no it's uh okay i explained myself kind of wrong uh they're getting if the rep is getting salary 1000 euros he will get fixed 600 euros and 400 euros is the commission if they're gonna hit uh i don't want to really share this uh it's it's kind of um well my question my question is really on the 7000 net new you bring in next month how much of a seven grand will you pay out across your entire sales team if that goal is hit it's it's i believe it's it's about seven thousand it's about hundreds okay so it's about a hundred percent but it's one time it's about 100 to the whole team yeah i got it got it so you basically you distribute one time commission 100 of that new revenue each month to the team if they hit the goal exactly approximately got it okay interesting let's talk about churn last time it came on you said he had about 14 annual revenue turn on a gross basis what was that over the last 12 months uh it got worse we've been challenged by um we've been challenged by not having instagram direct scheduling api which our indirect competitors have uh who is that indirect competitor uh it's hootsuite buffers proud social these guys uh some more like scheduling tools so we lost all of those uh customers who didn't have who've got bigger pain in instagram scheduling then in collaboration teamwork and approving approvals so so we lost all of those guys uh but now we start stabilized it and it's it's about 12 11 a year okay 12 so over the past 12 months you turned about 12 on a gross basis of your revenue yeah and what about expansion revenue so old cohorts that upgraded uh i don't know the percentage but in the past six months we are getting around two thousand two thousand five hundred euros mrr uh from the expansion and that's new each month new each month new each month two thousand two thousand five 500 pending at the beginning of the year it was around only 500 euros so we've been starting to focus really on expansion uh building really strong customer success um a team which is able to do these upsells and help these clients grow with us yeah well a year ago you had 40 000 bucks in in revenue right so ignoring all new customers between a year ago and today if that 40 000 base is adding in terms of expansion somewhere around two or three thousand dollars per month right you can back into call 24 000 per year and then you have the 12 churn and you can kind of do it that way right ish so that's about that would be about 50 expansion right on twelve percent churn so net revenue retention you feel like is above a hundred percent uh i'm sorry what was the last thing net when you add your expansion back to your gross revenue churn on your old cohort so you feel like net revenue retention is greater than 100 oh yeah yeah yeah yeah very good and then what anything change about how you're acquiring customers today what are you spending fully weighted to get 115 a month account yeah that changed a lot uh from from the last call we had uh we've been focusing quite a lot on facebook ads which was working very well but it's very hard to scale so currently we have multiple channels we do a lot of social media monitoring we do a lot of search engine optimization all of pr um um we are exploring uh more opportunities from uh uh how to say like uh review sites like g2 crowd captera how much are you spending on on facebook ads and all the direct paid stuff direct paid uh it's about 10 10 to 15 000 euros a month it really depends how well uh is facebook ad working uh because there are some limitations it depends if we are testing new campaigns on google ads uh we are testing some other alternative uh uh like for example capterra paid ads are they what's working better g2 or captera uh for us captain they're bringing you cheaper leads or higher volume or both uh higher quality of leads yeah yeah in other words the clicks they drive you per month the larger percent convert to a trial or paid contentino account yes exactly so what on your paid spend about what are you spending to get a new paid customer at 115 bucks a month oh it's about uh the cost per acquisition is about 350 360 euros okay got it so you're looking at like a three month payback something still pretty healthy exactly exactly now have you done all this bootstrapped or have you raised we're still bootstrapped and we keep boost wrapping bootstrap i love it man i love it don't you love it when you're bootstrapped and you're like growing a company you hear from all your friends that are bo i just raised 5 million bucks and then you're realizing yeah but they're burning money they hate their life they hate their board and oh by the way they're making no money yeah this is how i feel no it's a good feeling it's more stressful you know because you need to be very careful you need to be cash positive uh are you cash flow positive today oh yes yes we are like significantly oh yeah i would say i think that this data are not private we are at the moment we are around 85 000 euros cash positive uh on the year on the year yes yeah yeah yeah so 85 000 divided by 12 you're bringing about seven eight thousand dollars a month in profit yeah that's great so what are you so so basically we are yeah go ahead yeah go ahead hey bo restart your video just froze for me i'll ask a question while you do that so you're bringing on eighty thousand dollars in top line revenue per month you're taking about seven or eight thousand dollars a month to the bottom line um yes yeah which adds up to about 85 000 so far net this year yes exactly that's great very good any plans to raise capital uh we are open to discussion we have three criterias uh real quick stop your video and restart it you're frozen okay so can i just uh don't hang up just no no don't quit the call just stop your video and then turn the video back on yeah okay and that'll reset so so what are your three criteria when you're looking at potentially raising capital uh it's basically that they would really need to help us to go for enterprise some kind of smart money because this is something where we see uh quite a big potential okay good so so someone that strategic investor that can help with enterprise expansion what else exactly and then a very strong entrance uh to u.s market so i mean u.s market is our second strongest uh market when it comes to value of customers but we are not doing any heavy campaigns there if someone uh with the smart money will come like guys this is what we can get this is where we can get you in us market fine we can talk and what's this our second criterium and uh third criterium is basically if they have a connection with supplementary tools like hubspot hootsuite etc and basically i see a big potential in partnering up in making strategic partnerships or possible possible um acquisition and so if you did raise from one of these strategics how much would you target to raise you think ah this is this is something we are still discussing i i mean it really depends we haven't figured out the numbers yet but it would have to make sense to really get us what are you talking like a hundred grand or a million or ten million it's it's um above two million okay okay uh and why why why is it definitely above two million uh to grow the team basically uh to uh really start to scaling in u.s market uh so it depends if the if the if the investor would uh be uh very great fit for expansion to us expanding to this market great we need to two million for one year one one and a half year if they are helping us to get into enterprises basically we need to hire sales reps which are very expensive so we will spend that money for them uh when it comes to um making these strategic partnerships i don't think that we will need two million it really depends very good all right bo let's wrap up here with the famous five number one what's your favorite business book uh actually right now it's uh predictably irrational number two is there a ceo you're following or studying yes currently it is uh a guy from slido geez i always forgot the name yeah it's okay slide slider ceo i love slido they are great all of those people there so number three besides slider what's your favorite online tool for building your company uh i think still intercom intercom is great number four how many hours you'll sleep to eat every night eight and what's your situation married single kids single no kids all right and how do you oh 28 28 last question what do you wish your 20 year old self knew uh still do what you love and be the best at it uh and then don't pretend to be someone else guys there you have it contentino founded in 2016 they're up 100 year over year just about to break a million bucks and run right across 700 customers paying on average 115 bucks a month they are bootstrapped and profitable they take about seven or eight thousand bucks a month to the bottom line team of 17 people gross revenue turn annually 12 but expansion well north of that so over 100 net revenue retention spending 360 bucks to get a new 115 a month customer for about a three month payback period would potentially raise more than two million dollars have found a good strategic that could help them with the us market enterprise sales and connections potential partners like hubspot and hootsuite bo thanks for taking us to the top thank you so much it was a pleasure these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now