How Kontentino Bootstrapped Toward €2M in Revenue With 7,000 Agencies and Brands as Customers (Talk by CEO Bo Pokstefl)

Nathan Latka

00:00Founders, 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

00:23below 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.

Bo Introduces Kontentino and Its Mission

Bo Pokstefl

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.

What Kontentino Does: Social Media Management for Agencies

Bo Pokstefl

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

Recognition: Forbes 30 Under 30 and 7,000 Customers

Bo Pokstefl

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?

The Linear Revenue Growth Problem

Bo Pokstefl

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.

Mistake 1: Playing It Safe and Rising CAC

Bo Pokstefl

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?

Facebook Ads Dependency and Channel Collapse

Bo Pokstefl

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.

Word-of-Mouth Discovery and Attribution Fix

Bo Pokstefl

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.

Accumulating Cash and the Mindset Shift

Bo Pokstefl

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

Mistake 2: Hiring Junior Talent and Junior Leadership

Bo Pokstefl

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.

The CTO and CMO Stories: Cost of Junior Leadership

Bo Pokstefl

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

Horizontal vs. Vertical Career Growth

Bo Pokstefl

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.

Mistake 3: Maturing Up the Organization

Bo Pokstefl

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.

The Playbook for Growing from 18 to 45 FTEs

Bo Pokstefl

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.

Hiring a COO and Freeing Up the CEO

Bo Pokstefl

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.

One Call: Solving the Development Delay

Bo Pokstefl

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.

How the Changes Showed Up in Gross MRR

Bo Pokstefl

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.

The One Disadvantage of Being Bootstrapped: Build Your Network

Bo Pokstefl

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?

Audience Q&A: Raising vs. Staying Fully Bootstrapped

Nathan Latka

23:13Bo, you guys ever thinking about raising, or is it bootstrap fully?

Bo Pokstefl

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.