How Llama Life Reached $21.6K ARR and 950 Customers After Raising $690K Pre-Seed (Interview with CEO Marie Ng)

Introduction and Guest Background

Nathan Latka

00:00Hey, folks. My guest today is Marie Ng. She's the founder of Llama Life. After working in advertising in New York City, she taught herself to code by watching YouTube videos, then built and bootstrapped Llama Life as a solo founder to 700 paying customers, which we love. It has since raised a pre-seed round from high profile investor, Jason Calacanis. Let's jump into the story. Marie, you ready to take us to the top?

Marie Ng

00:20>> Sounds good. Thanks for having me.

Why Marie Decided to Raise After Bootstrapping

Nathan Latka

00:22Have the life. You have the life. You're bootstrapping. You have paying customers. Then you say, okay. Okay, fine. We're gonna let them in. We're gonna let the evil in. Not always evil, but we're gonna let the VC in. Why change paths?

How Jason Calacanis' Team Found Llama Life on Twitter

Marie Ng

00:34>> Yeah, so you're right. So I bootstrapped it to 700 paying customers. That was kind of the original plan, but it was a bit serendipitous. So I was building in public on Twitter and someone from Jason Calacanis' team saw Llama Life and they bought the product, they really liked it and they DM'd me on Twitter and they said, Hey, we can see that you're bootstrapping. Have you ever thought about joining an accelerator program? And I had thought about

01:04>> an accelerator in the past. I've actually done a few startups before Llama Life and I did actually go the VC path a long time ago. Not a huge amount. It was a very, very small check at the time for a different business. And I've kind of been through that experience and this time I thought I'd bootstrap it. But because it was Jason Calacanis, a huge angel investor, he invested in Uber and Calm and a lot of other

The Launch Accelerator Experience and Vision for Calm Productivity

Marie Ng

01:31>> huge businesses very early on. I thought I'd take the conversation, I'd take the call. And we had a call. I ended up applying for their accelerator program. It's called the Launch Accelerator. It's a three month program in The US. I'm based in Australia but because everything's remote right now, I was able to take part. And I went through that program. It kind of helped me think about Llama Life in a much bigger way. I think that's what

01:59>> accelerated programs are for, right? It's how do you grow bigger? How do you grow quickly? How do you scale quickly? And I really liked the vision that kind of evolved over time. And that vision is to help people achieve calm, focused productivity. Because nowadays there's kind of this false notion that we need to be working crazy hours, crazy busy, working all the time. And I just don't believe that's the way forward. I think we can still

02:29>> achieve productivity, but do it in a calm way and a way that's good for our mental health. And that's kind of what emerged out of the accelerator. And I really wanna see if I can make that vision come true. And as a solo bootstrapped founder, I thought it was gonna be more difficult. So I ended up raising money after the Accelerator program. Close around very, very no, actually not long ago, two months ago. Two months ago.

Pre-Seed Round Details and Valuation

Marie Ng

02:54>> So we're in I raised $690 k USD. That will give us a yep.

Nathan Latka

03:01And so I was gonna say, and what was Launch's model? Do they take 6% for $150 k or do they take equity?

Marie Ng

03:06>> Yes. So they take 6% for a 100 k USD.

Nathan Latka

03:10Okay. So is that part of the $690 k?

Marie Ng

03:12>> No. That's on top of the $690 k.

Nathan Latka

03:15Okay. So before the before the $690 k, really?

Marie Ng

03:18>> Yeah. Yeah. So I guess with the accelerator, you know, the idea is to be able to let you work full time on it. So that's kind of what happened, right? As a solo founder, I took the 100 k, gave away 6%, was able to work full time on my business during the accelerator program, which was three months. And then after that, you know, at the end you do Demo Day. So with demo day, actually didn't raise

03:39>> any money from demo day, but it gave me some momentum and it let me practice doing my pitch like hundreds and hundreds of times. And I ended up raising money after that. But, you know, as you know, raising money takes a while sometimes. So I think it took about five months in total from, you know, when I first started to when the money actually hit the bank.

Nathan Latka

04:00The six And did months you end up, I mean, this a tricky time, obviously. Well, I mean, it sounds like you closed before this sort of rocky period Just started past month or so. Before.

Marie Ng

04:09>> Yeah. Yeah.

Nathan Latka

04:10So you rate obviously the accelerator 100, 6% is what a 1,600,000 valuation. What valuation did you use on the seed round?

Marie Ng

04:16>> Yeah, on the seed round, so it was a pre seed round. So it was 2,750,000 pre money.

Nathan Latka

04:24Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:47your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:11get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

05:33not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:59going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're gonna go back to the YouTube video here in a second. But

06:21if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

06:47the interview. Yep. Yep. So call it like two point two point five posts, something like that.

Equity Sold and Reflections on the VC Path

Marie Ng

06:54>> Three point I would say like three point Oh, post.

Nathan Latka

06:57Three point sorry, sorry. 2.5 Yeah.

Marie Ng

06:59>> 2.75 pre. So it'd be like yeah, 2.75 pre. So it'd be three point I can't do the math.

Nathan Latka

07:07I'm trying to decide.

Marie Ng

07:08>> I can't figure out how much you sold.

Nathan Latka

07:09You sold you sold like 15, 15%, something like that.

Marie Ng

07:13>> 15 probably more like 20, I think, by the end of it. Yep. Yeah. Which is which is okay for a pre seed, I think. Yep. Yep.

Nathan Latka

07:21I mean, do lose well, it's interesting. We're talking about an app that's sort of about calm, but the second you raise, you go to an accelerator and you go on the VC path, I mean, is on. It is growth at all costs. It's like you've gotta hit it. And if you don't, your your optionality is like nil. It's very small. So I mean, I guess talk to me about before you made that switch, 700 customers, where

Revenue and Pricing Evolution from Free to $50 Annual

Nathan Latka

07:42were you in terms of revenue from those customers?

Marie Ng

07:45>> Yeah, so the revenue is still very small with the 700 because originally when Llama Life started, it was a free app. So it's a web app. And then we kind of went through different pricing models, right? So the first price was like $4 one time payment and that was it. It's grown over time. So it's now at $50 annual subscription. So that's quite a big difference. So when we're at 700 paying customers, half of those 700 were

08:17>> just one time payments. So it's kinda hard to kind of work that out. But I can tell you where we're at now. So we're at nine fifty paying customers. So it's not that far off from where the 700 was. And the MRR is at about 1,800 MRR US dollars but we only started charging subscriptions about a year ago. Because before that it was just one time payments or it was like free.

Nathan Latka

08:48Yep, now this makes perfect sense. So 1,800 per month today, $21,000 run rate annually. And that was up from about a year ago. What were you up from? I mean, probably are growing like crazy, right? Growth rate wise?

Marie Ng

09:03>> Growth rate wise, we are growing 20% month on month gross MRR.

Growth Rate and Choosing Between Revenue and Engagement Metrics

Nathan Latka

09:08Yeah. Yeah. Now look, anyone listening is gonna go, yeah, but she's going from a dollar to $6 at 600% growth. But still growth is growth, right?

Marie Ng

09:15>> Growth is growth. I think the other thing to think about is that there's different growth stories to tell and it depends on the type of business. So we're obviously a B2C product, we're a consumer product. There's different ways to look at it. And actually we're actually doing this right now thinking about this because when you raise money from a VC, you need to report monthly, right? You need to provide your, what did you do every month?

09:40>> Your highlights, your lowlights, what's your run rate? What's your revenue? What's your growth? And we're kind of thinking about like, what's the story at the moment? Is it a revenue story that we want to tell? So we do grow 20% month on month or do we want to tell more of a customer engagement story because it's a consumer app? And I'm actually leaning toward the latter. So right now a big heavy focus is analytics. Like how

10:03>> can we figure out what our engagement metrics are? Like are we gonna be tracking things like monthly active users? Probably more appropriate to do weekly active users or daily in this case. And what's the engagement? Llamalife is a tool that helps people focus. So one of the things that we are looking at is maybe we look at number of focus minutes per month. Like, is that the metric that we wanna track? And is that the metric

10:28>> that we wanna grow every month? Because once you start raising money, the goal is obviously, you know, can you put your business in a good position in order to raise the next round in eighteen months? Like, you put it in a a in an attractive position for investors? And is that position about telling a growth story on revenue or a growth story around customer engagement? So I'm actually leaning toward the customer engagement. I think a lot

10:54>> of consumer apps focus on that versus revenue on the early days.

Nathan Latka

10:58But Marie, so here's you're sort of in this very interesting spot because it's almost a problem that you have revenue because then people wanna harp on you about how low the revenue is when really you should just eliminate the revenue and just focus on user and engagement growth, you know?

Marie Ng

11:12>> Yeah. Yep. It's it's no. You you you're spot on because I think when you're bootstrapping, revenue is all it is like the number Yeah. One

Nathan Latka

11:21only saying this because you chose to raise. My advice would be very different if it was if you were still bootstrapping.

Bootstrapped Paywall Model vs. Potential Free Tier

Marie Ng

11:27>> Exactly. And that's why this is interesting because when I was bootstrapping, that was my number one focus, right? And there was actually a paywall on Llama Life. So Llama Life was a free trial and then it was completely paywalled and to access anything you had to pay for it. That was the bootstrapped model. And I think that makes a lot of sense for bootstrappers, especially if you're a solo bootstrapper because, you know, do you wanna support a large

11:52>> number of customers that are on free plans or do you want to support a smaller number who are actually paying for your product and are going to sustain your business over time? So that's kind of the bootstrap way and that's kind of where I was thinking before I raised money. Now it's a little bit different. We are thinking about potentially adding a free tier. So that will open things up a lot. We have a lot of

12:13>> students using Llama Life and they always email me saying it's too expensive for them. We have a lot of people, it's global from day one. So we have a lot of customers in countries like India as well. I get a lot of emails from people from India saying, hey, the exchange rate is prohibitive in terms of It's using one point

Nathan Latka

12:32being like though, this is not the If you're gonna go build a $100,000,000 revenue business, it's not gonna be probably from selling today $5 per month plans to students in India. You know what I mean? So it's interesting. So I guess why haven't you pulled down the pricing totally? I mean, why is it still on the site? Are you nervous?

Marie Ng

12:51>> Well, as I said, we're thinking about introducing a free tier. So look out for that.

12:58>> No, I mean, you're on the right track. That's kind of what we're thinking at the moment. We're we're in the process.

Nathan Latka

13:04Yeah, because that way your next round, you don't have to defend some VC going. The way you don't have $2,000,000 of ARR yet. And then you don't have to worry about saying, well, we're not focused on ARR, we're focused on engagement metrics and look at how good our engagement metrics are.

Marie Ng

13:17>> Yep, yep.

Nathan Latka

13:17Interesting. No, that's right.

Marie Ng

13:18>> That's the interest. It's very, very interesting and pricing is such a tricky thing. And think I the main thing is to think about like, what is your number one goal? Right? What is the thing that you're what is the metric that you're working toward and that you need to hit and then build the pricing around that, whether it's a free tier or it's a paywall or, you know, etcetera.

Nathan Latka

13:38How many folks are on the team today full time?

Team Size and Hiring Plans

Marie Ng

13:40>> There's just two at the moment. So I recently hired someone at the start of this year. So that's, we're in May 2022. So she joined in January. She's focusing more on content community, doing partnership deals, and I'm doing dev design business, everything else pretty much. But we are hiring. We are looking for another dev. So full stack dev to kind of take some of that time, alleviate some of my time as well. So if anyone's looking

Churn Rate and Annual Subscription Renewals

Marie Ng

14:11>> to join an awesome business, you go.

Nathan Latka

14:15Marie, if I ask you today what churn is, how would you answer that?

Marie Ng

14:18>> Yes, so churn has typically been quite low, four to 6%. Said, month

Nathan Latka

14:24Monthly? Was

Marie Ng

14:25>> Monthly, monthly MRR churn four to 6%. That said, this month has been a little higher. So we're now around 8% and I actually tweeted about this a couple of days back. What happened was it's been one year since I launched subscriptions. So the annual subscriptions, the first annual subscription has started to tick over exactly this month in May. So we started to see some of the original customers lapse. There's couple of reasons for that. I mean,

14:59>> there's gonna be some natural attrition, that's normal, but there's also a couple of other things. So credit cards have been expiring and people haven't renewed them. And then we've had a lot of problems with payments in India because as you know, like recent regulation in India has really cracked down on subscriptions. So that's been hitting us quite badly this month, but it's around 8% MRR churn at the moment, but that's high for us.

15:25>> That's Understood, understood.

Nathan Latka

15:26Interesting. Well, we're rooting for you. Thanks for making time for us. In the meantime, now let's wrap up here with the famous five. Number one, what's the last book that you read?

Marie Ng

15:34>> Oh, last book. Well, I'm reading Atomic Habits right now. I guess that's in progress.

Nathan Latka

15:40Two, is there a founder you're following or studying?

Marie Ng

15:45>> Because I started in the bootstrap world, I'm following a lot of the indie hackers. I love Damon Chen. He's building testimonials, basically connecting collecting testimonials for B2B businesses.

Famous Five Rapid Fire Questions

Nathan Latka

15:56Yep. That's a good one. Number number three, what's your favorite online tool for building Llama Life?

Marie Ng

16:01>> Oh my gosh. Well, mean, aside from Llama Life itself, I really like CleanShot. Take it basically lets you take yeah, CleanShot. It lets you take screenshots on your Mac. Probably use it like 20 times a day.

16:15>> That's amazing.

Nathan Latka

16:16Number four, how many hours of sleep do you get every night?

Marie Ng

16:18>> About seven.

Nathan Latka

16:19Okay. That's good. And what's your situation? Married, single, kids?

Marie Ng

16:23>> Single, no kids, one dog.

Nathan Latka

16:25And one dog, that count. Yeah. Yeah. And Marie, do mind me asking how old you are?

Marie Ng

16:31>> I am actually in my forties.

Nathan Latka

16:33Oh, amazing. Okay. Great. So we'll say 40. Reason I ask is because take us back to your 20 year old self. What's something that you wish that she knew?

Marie Ng

16:40>> Oh God, my 20 year old self was a mess.

16:45>> Something I wish she knew, I would say just stress a little bit less, you know? Because I never knew what I wanted to be. I would just say like, don't worry, you'll figure it out.

Nathan Latka

16:55Guys, stress less. It makes sense. She's building llamalife.co, a B2C app that helps you stay calm, stay productive and stress less. She has nine fifty customers on the platform today, about $1,800 of monthly recurring revenue. She's just getting going, which we love. Trying to figure out, should I have a paywall? Should I not? What should the free tier look like? She's got plenty of runway to figure it out, Just raised $690,000 in a pre seed

17:15round of a 3,400,000 post money valuation. So we'll see what she does next. Marie, thanks for taking us to the top.

Marie Ng

17:21>> Great. Thank you for having me.

Nathan Latka

17:25One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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, 1PM

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