MeetAppEvent Revenue & Valuation (2020)

hello everyone my guest today is matt's buck uh backlund he's the founder of a company called meat app he started out as an accenture consultant went on to be a cio in the nordics at a media and tech company called cision he then quit in 2012 to start meet app another biz and another business full-time in 20 since 2015 though he's been 100 focused on meet up matt are you ready to take us to the top i am thank you for having me on the show all right what does the company do and how do you guys make money we're an event tech company we build the mobile event apps for meeting conferences uh different events of different sorts so that means that we provide information create interactivity and improve networking at events an event is typically internal event or a customer event partner event uh that our customers organize so that means that we are we have a b2b business model meaning we sell to the organizer of the event who purchase a license uh to use the app either they use an existing app and purchase one event in that one or they rebuild their own white label app for them and it's either they purchase a single event and just use it once or maybe come back next year and then use it again or as we prefer of course they sign up for a subscription and use it the same app for many events over the and matt what is your average customer would you say pay pay on average per year for this uh if it's a subscription on average they pay between four and five hundred dollars a month okay and when you say if it's a subscription what's your revenue breakdown between subscription versus one-off uh it's about two-thirds our subscription okay so that's not that's actually not bad for this kind of space i know a lot of these kind of companies really struggle with churn and it's actually usually not a sas company it's a one-time fee kind of thing yeah i yeah i agree the thing is if you look at it from outside you would say you might only want to sell subscriptions but the nature of an event is that it's a one-time thing meaning our way of getting new subscription customers in is to get on to a single event and then if they like it and they do often they come back and want a subscription so so it's it's a it's a way of getting into to sign up for a subscription and once they're in uh uh subscription customers we have a really good retention rate so they like our customers like the product what's really good retention what's the what's the actual rate uh we have if you look at logo shown i mean how many actual customer names we lose i would say we we have a show on maybe 10 to 15 a year or 1.5 percent per month but revenue is a lot lower because it's the customers leave us our small customers who don't use that very much yep so what's the rest of the main revenue churn uh it's about half that i would say okay so how is that seven seven to eight percent gross revenue per year gross yeah that's great and then what are you what's net i don't have an exact number for that but um it's positive i mean we well of course anyway of course it's positive but do you mean above 100 what i mean is if if i i mean with the customers to upgrade and use the solution more compensate for whatever we lose if i put like that yeah so that would mean that you're above 100 but i'm curious how far off to be honest i don't know no i'm not sure about that yeah and just to be clear that we're measuring the same thing so if you go back to year and you look at everyone that's signed up in october of 2017 and you fast forward to today eight percent of the revenue has churned however that same cohort has upgraded way more than eight percent so net revenue retention on that cohort it's more than 100 exactly that's great very good and uh put this on a timeline for me so when did you when did you launch the company really full time uh well we launched it back in 2011 but but as you mentioned we started working with this full-time maybe from 2014 or so i'm starting to hire people to bring into the company so so we built it up me and my co-founder marcus uh started with at the time we had other resources of income and built this on the side but the first two or three years so when we actually uh started full time we could uh the the revenue from our customers could pay our our salaries and our and whatever cost we had and we have built it since then and what so when you i'm just i'm curious when you decide to go full time in 2014 what was the revenue about per month oh um that's a good question 2015 we had a total revenue around 200 000 us dollars 14 i don't remember it was maybe half that okay so what maybe 100 grand and then 250 in 2015. and then fast forward today so what are you doing per month today uh it's about or above 100 dollars a month okay hundred thousand i mean so that's that's pretty healthy so a hundred thousand per month and you said earlier that it's about a four hundred dollar rpoo on those people paying monthly let's put your customer account at about what 250 well not really it's a bit lower than that because you also have the the setup fees so uh we have subscription revenues of maybe 70 000. oh i see uh amounts and then we have the setup fees so about here maybe customers then yeah that the subscription ones and then about the same number uh of of uh single-time customers yeah some of them convert into subscription later on but if i calculate every year we have maybe 150 170 subscription customers and about the same number of single event customers yes that's great and what is growth been so a year ago today what are you doing per month um we we have been able to double our our revenue the last couple of years this year maybe not maybe in in absolute terms will have a higher increase but in percentage maybe not 100 percent so let's say it was we will grow with maybe 70 this year okay so that means you were maybe doing what like 50 grand a month about a year ago something like that something like that yeah yeah and just to be clear we're only you know the 70 grand a month you're doing today that's just the pure place sas revenue which you said is two-thirds of your total revenue so we can increase that to about a hundred grand per month when you add in kind of the one-time stuff plus the recurring exactly exactly yeah that's great now have you bootstrapped the company or raised bootstrapped okay great i love that and um okay so bootstrap's now team size today how many people are yeah where's everyone based we are 18 or 19 today we are seven of us here in stockholm we are three to two actually now but version three in in the us and we have a team of of uh nine in uh in india and chandigarh oh very good okay and how did you set up the team in india a lot of you know founders go how did all these people get these outsourced dev teams how do we get one of those it's i wouldn't say it's easy uh we have invested a lot of time and energy and money in it both me and marcus have been working with offshore development teams or all careers before this and i mean the credit to set this up and make his work is definitely his work in our local indian ceo anush but i think the the key to succeeding in having an offshore team is that you need to really invest in first of all getting right people in of course but also invest in getting them to understand the product the business so that they can actually think for themselves and make and question and come up with good ideas we can't we will never be able to give them detailed enough instructions for them to have code whatever we tell them but you have to invest in in making sure they really understand the product the business and and are familiar with what we're doing yeah so 19 people and sweden and other remote locations and then what are you spending to acquire one of these customers fully weighted it's it's around two thousand five hundred dollars okay and that means if they're paying you 400 500 bucks a month you get paid paid back what about five six months yeah yeah okay then i mean that's the average uh acquisition costs done split between both single event and subscription so probably if we were able to split that it will be higher on the subscriptions because it takes usually it takes a little bit more time and and energy to to bring in a subscription customer sure but it's very difficult to split it that way because sellers i mean the sales team will work on whatever leads they can and so so if you split the whole cost on the all the deals we do that's the cost yeah and i mean how are you going from you know 100 customers to 150 where are you finding the 50 you know more customers you mean the sources of leads and yeah how are you how are you getting customers uh well the most customers comes in through our website they contact us and we we spend a lot of time and energy and money on making i mean ourselves visible through search engines and of course advertising and how much do you spend on ads sorry oh total um too little i would say we want to increase it but it's uh it's probably let me think two to three thousand dollars it's too little yes but okay and and on that 3 000 bucks though if your cac is 2500 bucks that you're spending that money and only getting one new customer from it typically um you well i'm not following you you said your cac was twenty five hundred dollars and then you just told to acquire one customer and you just said you're spending about 25 or 30 grand a month so you're getting one new customer per month from that spend well in indica include also the sales salaries and all the the marketing efforts we do and so on so so maybe two years ago spending is just a small portion of that yeah uh i mean the search engines actually i mean the organic search actually bring in more leads than the ads so like what's a what's it what's a top search term you want to make sure you're number one for i would say event app of just event app and that does well for you and that does well for you yeah it does but there's also conference app there is interactivity at events there was a number of other search terms that that we need to to be visible on yeah yeah like i don't it's extremely competitive keyword you have all in the lube crowd compass double dutch expo pass and i don't see you guys actually listed on the front page anywhere so like how do you make sure you always stay on the front page well that's different on different markets obviously so the us would be the most competitive one uh and that's why we also need the ads to be visible in the us um i see so if i was in if i had just done that google search in sweden you guys would be on the front page definitely yeah i see uh and it's also a product that's kind of it's it helps us because our product is visible to lots of potential buyers i mean it's used by at a conference where not only internally at the company but at the conference where where the the participants come from many different organizations they see that and they actually contact us and say i like that app could you tell me more about it so that's actually an important channel to get leads to uh the product itself is visible and our name is there as a power buy thing yeah very cool yeah the powered by stuff works nicely huh yeah yeah it does um okay very good uh let's wrap up here with the famous uh five number one what's your favorite business book um one i like is is one called uh crossing the shas i don't remember crossing the gas about marketing yeah yeah yeah jeffrey moore yeah number two is there a ceo you're following or studying uh no not really okay i mean i read a lot about them several of them but not in one in particular number three what's your favorite online tool for building the business i'm not sure it classifies it as an online tool but we'll build our whole business on microsoft azure and the microsoft uh sas suite or cloud company that counts number four how many hours of sleep do you get every night between seven and night okay that's healthy and what's your situation married single kiddos married two kids two kids matt's your busy guy all right how old are you 43 43 last question what do you wish your 20 year old self knew oh lots of things but in this context i would i think it's to tell myself that you actually don't have to go into employment but you can actually start your own business that was something that i didn't even think you'd think of at that time guys start a company earlier he took him four years to convince himself to finally quit and go all in launch the company or the idea maybe in 2011 then went all in in 2015 once they could pay themselves salaries today a team of six people in sweden and remote locations they've passed um uh they've passed about 175 customers doing about 70 grand per month in pure play sas revenue almost that beautiful million dollar run rate now they're already over that when you add in their kind of one-time fees as well but growth is about fifty percent year over year they've got net revenue retention over a hundred percent as well only churning on a gross basis about eight percent of revenue per year spending anywhere between six and twelve months of first year acv to acquire these customers which are again folks looking to put on events whether it's internal or external that's what their app event app does all right matt thank you so much for taking us to the top thank you