Kronologic Revenue, Valuation & Funding (2019)

hello everyone my guest today is trey allenson he grew up in marfa texas playing with airplanes and minimalistic art spent too many years changing majors and then started a fraternity and newspaper and a 3d printing lab all three failed he walked away with a ba and nuclear reactor operators license jumped into fortune 500 tech made them a lot of money with diy software he designed to automate his job got promoted flew around the country for three years at enterprise consultant and then started his current company chronologic trey you ready to take it to the top i am all right what does chronologic do and how do you guys make money uh we automate the process of taking an inbound lead and turning it into a scheduled meeting on a seller's calendar so all they have to do is show up pick up the phone and trey why on earth are you doing this after you have like you know permission to run nuclear reactors tax a lot of fun running uh bring your own company entrepreneurialism is a lot of fun uh and the space is very exciting we turn inbound leads to meetings yes but our mission is to uh automate the calendar well there are some people that argue that this is a this space particular is a race to the bottom i mean i can off the top of my head acuity scheduling you can book me you then you have to deal with the industry kind of niche focused ones like the bookers for salons and spas and then there's even ones like yes we're specific to sales and marketing teams i mean how are you trying to position yourself here so you stand out yeah so you you you brought up several different uh sort of areas the market you've mentioned passive schedulers and you also mentioned uh we like to refer to them as many uh marketing campaign tools for sales people uh we are an active scheduler and i uh it's it's actually a very high margin uh area of the of the uh market what does that mean what does active scheduling mean uh it means that we carry the lift for both parties where calendly like if you send out a calendar link using yesware for example um you're putting the lift on your customer and you've already asked them for their contact information once hey can i get your email and your first name your last name your phone number your blood type everything else and then you send them a link an industry standards it takes you 42 hours to send them a link and then you ask them to find time on your calendar so you can schedule you can sell them something and then usually in order to download that invite you ask them for their uh email again actually that's exactly the experience i had okay so so how are you doing it differently ah so you go to a website fill out a form uh and within seconds before you've actually closed the browser you have an invite on your calendar ready to go and all you have to do is click accept the vast more majority of the time when we're proposing time when somebody's interest is peaked in our customers products they usually just accept the invite so the conversion rate from lead to meeting is extraordinarily high so how do you differentiate though right so like intercom and drift both have plug-ins that do exactly this their javascript code brought you know plug into the thing how are you different well intercom and drift or just chat based solutions we handle all lead types whether it is through a chat i i say use the chat based solution i mean if you can convert somebody there convert them there no no they have i i've used them all these products like there there are elements where you can say i just want to install a scheduling tool in in in a chatbot kind of format and they are converting web cold website leads into booked demos i all i'm asking i'm not knocking the model i'm just trying to understand what you're a smart dude what's your mouse trap is what i'm trying to get at i i understand so yeah that's in chat format and we actually have the same technology on our website like if we convert somebody to a meeting in a chat bot like at the bottom of a screen you should definitely do that that would be best practice okay that's the vast majority of leads aren't through the chat channel vast majority through our through uh white paper downloads or demo requests or events or webinars or anything else we can handle all of those other lead types i see i see okay very good all right let's break down the the model here so if a customer listening right now sold they say i want to i want to pay for tray stuff what's the average customer going to pay you per month to use the tech they're going to pay about 800 bucks a month for six users um and uh that's unlimited lead volume uh and that simplifies it's a free admin the admin is not charged not one of the seeds that admin can manage all six users and that's again lead routing whether it be round robin or customer okay so when you look at your current customer profiles the average one is paying you about 800 per month and it's usually about for six seats all right that's the average we call that our teams model uh you know our our bread and butter is the enterprise so more of a custom contract from many many more seats than six but yeah that is kind of the starter package we also positioned that to enterprises as as a good pilot program as well and put all this on a timeline for me when did you launch the company what year uh we founded the company in 2016 bootstrapped it to revenue uh wrote raised uh our first bit of money in october and in november october what year uh last year okay 2018 and how much did you raise uh we raised a hundred thousand bucks okay and uh we've closed some angel checks since then we're in the middle of a round uh and we um it's a train how much have you already closed to date total funding yeah uh 135 okay and you're raising now why is now the right time to be raising in your opinion because we have a market we have a product people give us money for it we need to expand our sales and market but but i mean you also have to take into account like macroeconomics right so are you seeing something in the market right now we're like now is the right time to do this oh absolutely i mean everyone has this problem you know our biggest biggest uh customer is thomson reuters and our smallest company customers man uh insurance company and they both have this problem and we can provide value to both so how much are you hoping to raise half a million okay got it and by the way we're both in austin do you think you're able to get that in austin are you having to go to you know the coasts or something to get the capital uh we're showing some pretty good traction austin um but i'm not against uh raising yeah and are you doing are you gonna do a price drone direct or a convertible note this is a note uh but this is to get us to that price round yeah so let me ask you a question have you why go out and do and dilute yourself have you did you look at venture debt at all we have we have i mean you know you have to get debt you have to put something on the table so we really haven't you know what to actually answer your question uh no not thoroughly yeah okay got it what have you so 2016 was launch day it's been called two and a half years what have you scaled to in terms of total customers today uh we had we closed our seventh customer this morning oh very good okay good so can i take seven times 800 or about 5 600 bucks per month right now i'm sorry can i take seven times that 800 per month price point you're doing about 5 600 per month right now oh no no you can't uh because of our first customers were drastically underpriced we brought in a head of sales uh and we've since adjuster pricing model thompson reuters is a really only big big customer okay so what right now per month what do you add about more like two thousand uh we're we're just over grant okay great just over grand so this is great by the way this is a great place to be or you know the beginning stage is moving stuff forward so a grand now if you go back a year did you have were you pre-revenue at that point no we had revenue but it was small okay so so we'll say basic basically zero right yeah ben and i were still working at vmware and um and we managed to get a couple people to bite off and cut us a month to check while we get out you mean in terms of agile investors or customers customers okay excuse me so that was my next question is how did you get your first two or three customers and it was because you had relationships at vmware uh yeah actually it was through a relationship at vmware with uh tier one top-tier account sales people uh you know if that's uh yeah that's that's really freaking about so so fi you're looking to raise 500 000 right now um are you guys obviously operating i guess i break even unless you're subsidizing with your own money uh we are so there's four of us um all in austin all in austin uh yeah i mean we we're running you know we obviously got burn uh yeah we keep our expenses low but we definitely aren't running it when you say burn i mean are you talking like five grand a month or like 50 grand a month oh really i think last month was nine okay do you think next month's gonna be 12. got it got it got it got it and so you're just using 135 you already raised to kind of fuel the company what's churn look like well you don't have an updated enough okay just too early have you lost any customers so far uh that very first one uh yeah we don't have him anymore but not because of any he's actually using our tool not in the right way he wasn't he was using it as an outbound tool an inbound tool which he had quite a bit of success with but uh he left the company yeah what about what about cac and payback period too early yeah i'd say it's too early i mean i could give you some numbers but like no that's fine yeah i mean my i mean my thing what shocked me most about what you've said so far that price point to me sounds extremely high for the scheduling space unless there's just something i'm really missing about what you're doing i mean there's just so many tools that you can get started with the team at 10 for 10 bucks a month uh to do you know scheduling security scheduling they just don't work i mean well they do by the way i mean i use acuity and they've just passed a hund you know 1.8 million bucks in mrr and i've had him on when he was doing only 5 grand a month in mrr so it is working okay all right i mean i how do you get i guess my question is how why 800 i mean you have some conviction about that why why 800 a month it's it's defendable the reason why is because um there are 30 000 inbound teams the united states with an average headcount of 13 reps which would be roughly 20 billion a year spent on following up on inbound leads traditionally enterprises expand their capacity follow up on inbound leads through hiring another person giving them these tools at vmware we rolled the prototype of the solution out to a team of 38 people took their closed one from 27 million for six months to 54 million dollars that's 2x which was we predicted and the team size was reduced from 38 to 25. um it works it works better than hiring another human being it's active on both sides of the equation it requires a single click from the recipient to book the meeting and exactly on the sales persons you know by the way i hear everything you're saying but like you're i mean if you had a bunch of webinar i'd be like okay yeah you put me wrong it's working but but you don't so i'm trying to figure out like why you don't have more customers over the past two years and i mean the only thing i look at is you're exactly right the everything you just said is why the market is so hot that's why there's so many competitors and they're all priced way lower than this i mean 800 bucks a month for six seats you're priced at more than 100 bucks per seat for this thing nathan we don't have uh because it hasn't been two years uh it's been since november so you said you launched in 2016. we launched the company 2016 okay but we we didn't launch the product in 2016. okay developers in 2016. we did bootstrap we did sell uh some software in 20 early 2018 late 2017 that first customer i mentioned earlier the one that was using it for outbound but that was more of a poc customer sort of just get our get our product in the market and see it work we didn't we haven't started we didn't start pursuing sales until november november was when we actually started pressing for sales q4 in the enterprise selling enterprise software in november and december pretty challenging but we managed to to close a couple deals and we're continuing uh today well look i i hope you prove me wrong i just i just know that there are cheaper options so the only thing i must be missing is you feel like you're doing something vastly different than these cheaper options that allow you to charge the price you're charging so i hope you come back on in a year and say f you nathan look what we did you know boom right i i hope you do that so i'm rooting for you but let's in the meantime wrap up with the famous five number one what's your favorite business book um you know i i've always enjoyed that hype cycle from uh uh hbr uh it's called hype cycle yeah all right number two is there a ceo you're following her studying right now um you know the vmware's ceo pat gelsinger has always been kind of a source of information uh inspiration to me i think he's i like the um like the the nerd angle number three what's your favorite online tool for building your company that's that's interesting hubspot i think we has been fantastic for us we have the entire suite it allows us to be scrappy and important number number four how many hours you sleep to eat every night i get seven okay and what's your situation married single kiddos uh i have a girlfriend that i love very very much okay so not married no kids no kids and how old are you i am 31 31 last question trey what do you wish your 20 year old self knew that um that is life is gonna keep on getting better and better and better guys life gets better launch is coming back in 2016 uh again helping companies uh line up meetings faster more effectively and with less less friction to the potential prospect it's called chronologic they raised 150 thousand dollars to date have seven customers they're doing about a grand per month right now on revenue up from you know very little called 100 or 200 about a year ago early stages but he's again scaling raising capital now targeting 500 000 four people in austin texas burning about nine thousand dollars per month trey thank you for taking us to the top hey thanks a lot appreciate it