Loomly Revenue & Funding (2024)

hello everyone my guest today is tebow clementi's a self-taught programmer and began building software to make naomi's job easier in 2015. back then the pair was managing a marketing agency and developed an in-house solution to streamline the process of creating and sharing editorial calendars with their clients encouraged by early feedback and peers about the prototype they launched and made it available to other marketing teams this company today is called loomly all right tebow you already take the top yes sir now who who is naomi is this your partner yes this is my spoos i and my and the co-founder of lumley that's so sweet so you put yourself you built your spouse software and now you guys are co-founders yeah i guess we can uh we can feel you know that lumley is kind of the most romantic gesture i've ever done here's the real question who has more equity up well we are exactly on par wow 50 50. so what if you disagree on something how do you break the decision to tie we have a board well usually we agree but we have a board in case you know something happens so you know like any kind of startup uh that is ventured back how did you build the board uh well you know it's it's people who have been following us and helping us since the beginning so it made sense to uh you know have them join the ball how many people are on the board four four pa well that's like rule number one of boards is never have an even number well it's not because there are there's an even number that of people that we have an even number of voices yeah or votes so but usually you people do three five seven because the whole purpose of a board is to split a tie but if then the board could tie two two then what would he do well like i said we don't have the same number of boats uh i have oh i see i see i see i understand okay very cool let's let's talk about the product so so what does the company do uh you know we are what we call a brand success platform and so what we do is that we help marketing teams uh streamline collaboration uh you know along the entire content publishing cycle so we help them manage their assets come up with ideas for content actually produce the content um with some editing tools and then we generate mock-ups for them so that they can share the content with their team make sure that everyone is on board everyone sees you know what what the posts are going to look like they can approve and then you can publish and you can respond to comments and you can of course measure your success and then you start all over again i mean so is this like a more sophisticated version of like hootsuite yeah in a way uh you know you can think of it as like hootsuite meeting github in the sense that you know you can upstage your content you can review and improve it and then you distribute it i see interesting okay and and give me a general sense of what customers pay per month to use the technology uh 50 bucks on our brand one five or five zero five zero five zero interesting and when did you land your first paying customer what year april 2016. and was that the first year you guys had the business yes it was two months after launching wow okay so how'd you get your first customer two months after launch uh well it's you know we kind of opened up the platform in public beta and uh there are people who started you know signing up and from day one we had a paywall it was 12 bucks per month because we wanted to uh make sure that people were interested in using and paying for the product and at that time uh the free trial that we you know that we had was two months now it's 15 days but at that time it was two months so we launched in february two months later we had the first paying customer okay but where did you get that customer from that doesn't just magically happen you have to make it happen well you know noemi and i we used to have an advertising agency so we were in all those you know social media marketing and digital marketing groups online and so once you know we built the product because we built it for ourselves in the first place we we started to share it in those groups and we said hey uh we built this tool for us are you interested in giving it a try then you know people started signing up and then they started saying yes i've been looking for that for 10 years or i've been trying 10 different products and none of them is doing what you do so that's how it started how much revenue does the agency do in 2015 well that's usually something we don't we don't share because it's kind of not relevant to me what actually it actually is right so so when you look at the success of a lot of the largest sas founders hootsuite included they usually start as an agency and then there's a very tricky moment for the founders where you have to figure out do we stop the agency and go all in on the sas do we do both or do we kill the assassins doing the agency so by asking how much revenue you did it helps me understand what you guys gave up to go all in on the sas yeah we were you know we had an agency in france we had an agency here in the us uh it was you know it was it was enough to kind of sustain everyone we were growing nicely but you know it was very clear once we started having feedback on the product that the product would be just you know uh had just more potential because it was basically allowing us to do what we were doing for a couple of clients but at scale and today we kind of serve 7 000 clients you know around the world so you know that's you know it kind of proved to be true so this wasn't a situation where the agency was doing 10 million a year in revenue you shut it down on loom it was like a smaller than what like a million bucks a year or less yes i see i see okay that makes more sense so so let me know second question is did you use agency cash flow to invest in the software at the beginning or how did you fund the mvp yeah uh that's exactly what we did so i wrote the first line of code in august 2015 and you know we only incorporated what is now lonely in uh july 2016. so during that entire time we were kind of working by day on the agency and then you know with whatever money we were making we were kind of you know financing uh you know like the hiring of our first engineer and some some marketing and all the expenses that come with building software so it was just youtube it was just you two at the agency then yeah oh wow okay i mean indeed i mean in the u.s but uh yeah well how many total people were full-time at the agency uh depending on you know it's like agencies they always kind of go up and down but it was like you know anywhere between four and six i see i see so did you move most of them over now they're still with you on the sas product uh no because it's different skill sets you know so only you know i mean i moved from the agency to i see okay and so flush out the team today how many total people on the team uh we're seven seven uh you know there are i kind of oversee the product and there are three engineers with me and then noemi kind of oversees everything on the marketing side and there are two customer success managers with her and we are kind of uh we're currently opening four positions so growing pretty fast now okay so the first customers came from your agency customers it sounds like you just up sold them from agency to sas is that accurate um i wouldn't say so like we we did try the product with the with our agency clients to get some feedback so they did try it first but i wouldn't say they were the first paying customers the first paying customers were people that we didn't even know uh from those uh you know social media marketing groups that started using the products for the trial and you said it was interesting enough to pay for it can you name one or two of those groups we're talking like social media examiner facebook group or amy porterfield's group or like the laura roder crew like yeah it's just kind of saying uh no emmy would know that better than i do because she was the one managing that and she's the one who is involved in all those groups but it's it's you know that's the idea on facebook and on linkedin and even sometimes on reddit yep okay very cool now uh you've built this business up those were the first hundred customers how many are you serving today uh over seven thousand actually going uh to eight thousand okay guys so seven thousand paid do you have a free plan nope okay we have a 15-day free trial and everyone i see i see icic do you require a credit card at the start of the free trial nope tell me why you want to keep using the product walk me through that decision everyone does this differently yeah uh well you know we think that uh what is important is that we make the free trial as seamless as possible so that you know if you hear the value proposition in one way or another you come to the website you find it's interesting you sign up for your free trial you don't need to put in a credit card with a company that you don't know yet um you can try the product with unlimited features uh you can invite as many people as you want so that you have the actual feel of what a product can do and then at the end of your 15-day free trial if you enjoy it if you have you know if your team is happy with the product then you can keep using it and then that's the moment when we say hey you can add your credit card and you can select any plan that you like what besides time so 15 days runs out on everybody but you probably know if someone's going to convert or not based off usage metrics what are what are the uses metrics you look at where you know if they do them they're probably going to convert usually it's how many you know pieces of content they have created it can be uh you know social media posts it can be ads and another good indicator is usually how many people we have invited in the team to join the platform i see okay so seven thousand customers today you said going to eight thousand help us understand growth how many customers exactly a year ago uh you know usually we look at at uh you know annual recurring revenue we are between four and five and uh last year you know i mean we're already 20 21. so uh i would say end of 2019 we were around 2 million yeah so we grew 100 in 2020. yeah that's impressive to grow another 20. another 100 percent in 2021. so you think by december of this year you can get up to an 8 million run rate something like that yeah that's great yeah that's incredible okay yeah so just to be clear seven thousand customers fifty dollar arpu that means about three hundred fifty thousand dollars a month in revenue four point two million dollar run rate up a hundred percent year over year um all this growth can't just happen from facebook groups so how do you add your you know the how did you add your last thousand customers uh you know it's it's a mix of things you know uh i mean you're you're a good marketer yourself uh so you know we have different channels uh you know a lot of content uh you know some some media and podcasts who want you to have us with them it usually helps a lot uh we have terrific reviews on all the websites like you know g2 crowd and captera and we do some adwords so all of that you know kind of works together and then uh one thing that you know also helps a lot is that you know people who try the product and they refer other people the vitals of people um and that's really how it works yep do you have any like sort of powered by or any sort of like these sorts of things product marketing built in um we have a url shortener which is loom.ly and so whenever you create a post and you want to shorten your url then you know you will have a loop.ly um url and so then you can go you know if you click on one of those links of course you go to uh the url that has been shortened but if you are curious you can go to room.y and see that's yeah interesting and um when you look at just your paid spend what are you spending on average cac wise to get a new 50 a month customer um well that's that's usually something that we would rather not share but but you know we are we are well about the the famous uh ltv over a cac ratio of three well l2p to cac doesn't mean a lot if it takes you three years to recover the cac so it's way more important to understand how fast payback period is right so maybe not what five months is what you're at so do you you're comfortable sending 250 bucks 300 bucks to get a customer got it now it sounds like you've raised capital how much have you raised uh a bit about three million there are in inequity okay and why i mean this doesn't feel like it's really hard technically i mean it's hard but you don't need to raise a bunch of capital why'd you raise um you know there is it's a big market uh if you want to go after a big market you also want to have the resources to grow fast so you know uh we also had um very you know we had exceptional investors and entrepreneurs around us who uh you know looked into what we were doing and you know recommended that you know we accelerate and so when we kind of you know run the numbers it did make sense and so you know that's probably you know part of uh the reason why we're able to uh be where we are now and and grow at the the pace that we are growing now and was that three million just done recently in one round or was it broken up no it was a couple of rounds um and it was you know between uh 2016 and 2019 uh all with the same investors oh i see okay great now are they still sort of doing like unpriced safes or have you had a price round already uh no it's it's uh it's it's only a seed and it's a safe oh i see i see okay so i mean do you have any plans i mean great growth right any plans to raise this here uh we don't need uh to raise this here uh we are growing pretty well uh you know if at some point there is a an interesting opportunity that that comes up we'll of course look at it but uh it's not what we need at the moment do you have you set yourself up with basically unlimited runway are you profitable today yeah okay so i mean how do you you know when investors and vcs put money and they really want you to be like foot on the gas i mean do you do your board meetings do you ever hear something like tebow we should be profitable should be investing all on growth like we should be raising capital you're growing go go go well we are actually you know uh we're we're good uh on both front we're good on growth we're good on on profit so we have found like the right balance for us uh the board is on board uh so you know uh we are kind of you know maximizing the growth that we can absorb at the moment uh so you know all seems pretty uh organic and and feels pretty good but i mean once you get on the vc path especially you know raising three million bucks i mean and and numbers that at this level like 350 million are i mean you like growth rates have to be like even larger i mean 100 every year is fine especially if your bootstrap but you've raised so like how do you how do you go instead of finishing this year with eight million how do you finish it with 12 million well we keep improving the product uh you know the 100 growth rate is is our conservative you know forecast uh we feel like we can we can do better than that as as we keep improving the product and then the kpi kind of stuff improves so it's not necessarily a matter of how much we raise and what the investors want because they kind of trust us on that problem what would you tell founders that say um uh i you know i know i don't want to work on that product someone's already done it before i mean many could argue what you the space you're playing in has been done over and over but you've built a unique mouse trap that's given you 8 000 customers what advice would you give those entrepreneurs um well the the first thing is uh i'm not on the team of people who say you know if there is like there are already it's a crowded space you shouldn't go i'm actually on the team that says if it's a crowded space you should go uh because it means you know there is a there is demand um so that's number one uh number two is when you do go on a crowded market there are still ways that you can win depending on what others uh are not doing right uh and so for instance it can be you know having a great ui and a great ux uh so that you know when people start using the product they don't feel like you know deterred they actually want to keep using it and so that's one of the things that i believe we do quite well based on the feedback that we have and the last thing and i believe this is probably the most important it actually doesn't matter uh what size of market you are on it's just try to provide great customer service uh with great customer service you can uh you can in my opinion uh you can be pretty much any competitor uh so that's you know this is what i would say uh go to the market even if there are other people um do better than what other people are doing in terms of ui and ease of use and for sure beat everyone in terms of customer service great customer service should mean lower churn than average in terms of other competitors at this sort of price point what's your turn look like today um you know it's a it's uh on the lower end of the the benchmark for uh success which you know is uh between three and seven percent uh for reference so we are on the lower end of that got it and that's like four or five percent uh churn monthly or annually mostly monthly okay got it very cool now do you have any um obvious sort of expansion revenue opportunities where you can take a 50 a month client and upsell them to a 500 a month client or is that coming yeah that's uh you know that's usually uh the more successful our users and customers are uh you know the more features they want to use the more people they want to invite in the team and sometimes they are also expanding the number of social accounts that they use and so all of those things are a great path for the users what is the customer don't name them obviously but the customer paying you the most how much are they paying you uh something in the like the range of 20 000 per year and why is that just a lot of seats or something else yeah mainly yeah yeah and very cool tebow this is great let's uh let's wrap up the famous five number one favorite business book uh i love uh how to win friends and influence people i don't know if it's business book but i love it of course it is yeah number two is there a ceo you're following or studying um [Music] not necessarily i mean uh well you know like everyone i like poor graham and elon musk not very you know eccentric number three what's your favorite online tool for building loom lee um github of course number four how many hours of sleep to get every night uh i tried to get eight and what's your situation married single kids i'm married to michael founder married any kids yet or no yeah one kid one kido and how old are you uh two and a half sorry how old are you oh how am i sorry uh i'm 33 33. last question what's something you wishing you when you were 20 tevo um you know just uh don't listen to don't try to please your your friends or your family or like your investors or whatever just you know try to please the customers it just it will save you a lot of time and and her drugs guys loomly helps you schedule and plan your social media calendar they've just passed a 4 million dollar run rate up 100 year over year from a 2 million running got their first hundred customers by basically shutting down their agency in 2016 launching this how to pay wall and 12 a month price point from the beginning so they had validation early on now today again growing rapidly almost eight thousand seven between seven thousand eight thousand customers three million dollars raised with just a team of seven so healthy revenue per employee they've been very capital efficient spending 250 bucks to get a new 50 a month customer will see what tebow does next tibo thanks for taking us to the top thanks for having me nathan it was a 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 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