MeetingRoom Revenue & Valuation (2019)

hello everyone my guest today is johnny crossgrove he's the founder and chief executive officer at meeting room dot io started his career in volunteering and activism before moving into events marketing and tech looking after one million plus guests in dublin and boston he completed his mba and began building the future of work with focus on sustainability and emerging tech johnny ready to take us to the top yeah thanks for having us all right so what's the connection between the million guests in dublin and boston and meeting room yeah so i used to put bums on seats in the physical life working in nightclubs venues concerts that kind of thing and then it just kind of saw where i moved into tech moved into social media and then it just became the obvious next thing to do so what do you mean one million guests in dublin in boston yes so i would have looked after weekly events in different venues over the last 10 years and it's just it's a it's a numbers game like you're talking about like literally filling up a bar in dublin or boston with people yeah so i'd look after but say 1100 people a week on today one or two nights a week so that's how bootstrap meeting room okay so what is meeting room so meeting room really simply we offer a virtual meeting room with collaboration and presentation new tools which participants can play with so pointing discussing getting the room together it's really really simple everything you can do in real life you can do in a virtual room okay and what do people pay for this on monthly or annually so rain's from we start with a free sas model in terms of you've got a free tier you come in you get your first room then you move to a standard which is 99 per room per month that maxes out as five rooms and then you move into enterprise which starts at ten thousand a month okay sorry ten times in a year so would you say average those about 100 bucks a month so hey we're only we're only a pre-roll you have we're actually releasing open beta this week okay so no customers so we've got about we've got about nine or ten people who just started paying us and putting those through right now okay so 10 and they're all paying about 99 bucks a month 99 or case studies were very much a case of this is really proof putting the proof in the button okay we would have had different people where it was like bank of ireland who would have worked with us to put together a case study which actually ended up which which was at the very beginning our first week in business and that's actually just been published in springer recently okay but right now about a grand a month in revenue something like that yeah courage in the ground for a one to five k one to five k okay looking at the last two or three months and when we moved when did you write the first line of code for the platform uh we spent the first two months just going out with a pen and paper and talking to people and not letting them see the tech at all trying to beat the tech out of ourselves i suppose really learning what the problem was and the problem isn't using vr or different tech like that it was much more a case of right how do you actually get it get in have a more effective meeting first line of code would have been done about march 2017 and we've been building ever since how much money did you spend on the mvp before your first dollar revenue [Music] uh nothing we just built we got we actually were building a different kind of company we were looking around hey let's build a vr company we were working between beijing and dublin and then we had been kicking around an idea for a whiteboard before and that very quickly became the actual product when we were trying to get things moving okay but you wrote the first line of code in 2017. your first revenue is just not coming in almost two years later so it didn't cost we would have take we would have taken in revenue pre-revenue first year so working with people educating them what we're going through very much paying for our time to learn about what the customer actually wants because that's what we learned very early you can talk about stuff for free what were they paying you for johnny so coming in first they're doing a study over a week or two and they'd be paying anything from 10 to 25k for that okay it's like a consulting fee yeah okay sorry yeah what i'm asking is before your first dollar of sas revenue how much money did you guys sink into building the mvp which would mean you probably took the 10k consulting fee and reinvested it back in engineering to build the sas platform that's my question oh way through yeah so we would have probably put about 100k back in to actually kick it off and we've got some support from enterprise ireland about 50k and that would have helped us get the whole thing together so uh we've been lean is the enterprise ireland money dilutive yeah yes so it's equity partner yes equity yeah interesting how much total have you raised to date uh that's due that's all we raised okay so 50 plus your own money that you've reinvested from the consulting oh these blood sweat and tears and a little bit of friends and family but give or take yourself what's your team look like today how many folks so we just finished up a death cycle we're in harvest mode so very much learn more so we were about 12 we're down to about six right now okay and that's probably that we work very much we're a remote team ourselves and so it's very easy for us to jump up and jump down we've had to go through the fun learning points along the way with that when you were 12 people i mean give me the month i mean you were obviously burning capital which month did you burn the most money how much was it uh about six months ago but then we've been cutting ever since just getting it down we've been keeping it we very much go look we're building this part of the room this month and moving it through that way how much was your burning six months ago about 10 a month okay and what are you down to now about oh we're down to less than five at the moment okay fair enough and this is all you're just basically planning how to trying to stretch this 50 000 you got from enterprise ireland oh yeah plus customer money in terms of you taking pre-revenue and just being really smart not trying to take on loads of consultancy work because they may become a consultancy we totally had to make a few hard decisions and that's what actually built out our platform to be what it is today what do you mean taking on pre-revenue if it's not consulting and you only have 10 people potentially paying 90 bucks a month so people come on during our closed betas and paying us to actually say look we're going to sit down a few times a month actually get in at meetings and actually help plan out how they're going to go from proof of concept right through to an actual deployment because we're very much working between the smb but also the enterprise space so it's making sure that some of these customers are going to take a lot longer to come on board and some are going to come on board as soon as we hit this thing live so it's an onboarding fee yeah okay so um you said 10 ten of them have come on today doing somewhere between a hundred or a thousand and five thousand grand a month total across all the customers uh these people you're saying started on before they started paying pure sas they started with some consulting fee to help you essentially consult them with the onboarding out of that we're getting in the room a lot of people were just coming say of the current user base we've had a bit we have about 280 people have been trying this since january and we've got about five or six of them sorry nine of them have come through and actually said look we're gonna start paying for this now let's get it moving so that's where we've really been just going look get this on board by getting in the room and one of the things we've really taken on board is our customer journey our customer development has been literally sitting in our product talking to people learning about what's going on there so in terms of payment i can't count that and i wouldn't call that customer in terms of we're looking for a revenue point of view here but we've moved up about it we've gone we took in about 25 last year and we're at about 40 this year so far but uh yeah yeah okay cool uh what's the breakdown on the team today between engineers and sales marketing so we're right down i think mainly to make it sorry mainly on sales and marketing at this point we've got one or two devs who are pushing through on different bits and pieces but we're very much going into a planning phase for the next part of development any churn has anyone started paying and stopped no actually if we've had one or two who we knew were going absolutely nowhere but we wanted to learn and make sure part of the process was saying why this doesn't fit right now but we haven't had people who've been paying us and stopped paying us so far especially since we've only just started taking on board maybe after a few months and what are you paying fully weighted out in terms of tac to get a new 100 a month customer so by mainly based on time i am right now in terms of manpower as opposed to we're knowing no paid acquisition we're taking in very much organically right but you can quantify manpower total salaries in the month divided by new customers out of that month well that's what as i said earlier on that's what our entire that's what our burn is on right now is pushing towards that so you're looking under 5k uh okay so i'm sorry but down per person yeah my question is to get a new hundred dollar a month customer right what are you spending that obviously includes head count expenses from your for mark or marketing and sales people so can two or three two or three sessions together then we it's either a go or no go okay so do you do you have an estimate right now for what your cac is no not right there not right now okay uh just because and by the way it's fine it's just because you're early on so you don't know but but the key is there's four people working demos to try and convert these people and so obviously the more they convert each month the cheaper your cac is if you keep that same team size yes absolutely yeah part of our cac i suppose wouldn't it would include making sure people have headsets and that to actually get going that's the big difference oh no no part of the process is it depends on how long it takes us to get them to buy it i'm usually that's more of a right everyone has a vendor so we're working through that that's part of our cache so i we're that's still at early stages because we have to learn right how long this is actually going to take to get through what's that thing cost they just held up so that costs right this is the oculus quest and quality for the lighting here oculus quest uh enterprise versions about 999 dollars that seems like a big barrier to entry so to even use your tech you first have to convince everyone to buy every user to buy a thousand dollar piece of hardware well no that's usually that comes a little later and that's part of the story that is changing at the moment for the last year or so or two years when we were talking to people we're going with our ipad first we're not vr platforms so we're vr platform but we're not vr first we have people come in from every device and that's what's unique about us everyone comes in and they have the exact same user experience whereas if you're on skype on desktop or skype on mobile they're slightly different experiences for us it's the same way all we've done here is when they want to get that full immersion they can't they get a heads up and we've seen a big change over the last few months but it's too early to give you a definitive it'll be a statement not a fact very good all right let's wrap up here with the famous five number one what's your favorite business book so the rise and fall of dinosaurs uh steve broussard and bad blood john karu most recently just because it's really interesting getting into it number two is there a ceo you're following or studying so two at the moment i am at different stages eric ergon and zoom and we've met him before adam before and um ivan joe in notion number one yeah both good guys number three what's your favorite online tool for building your company links in with that notion at the moment that's absolute number one apart from obviously what we live on ourselves how many hours of sleep to get every night uh aim for seven try to get eight and uh how old are you 31 31 in situation married single kids uh sorry very much living girlfriend and puts up with a lot of my stuff and uh yeah no kids uh no kids okay and what do you last question what do you wish your 20 year old self knew find balance uh miriam and my my better half and be boring and in terms of i always i always love being boring everything meticulous have lists out and just keep with that yep guys meeting room.io doing caught between a grand and five grand a month right now they rent virtual meeting rooms whether it's via oculus or via ipad they're exploring many models 10 customers say first line of code written in 2017 first paying customer for the sas product called 2018 100 grand spent on the mvp in the meantime they're making cash off doing consulting work in the same exact space they raise about fifty thousand dollars from enterprise ireland that is dilutive they're burning about five grand a month right now six folks on their team two engineers four sales people as they look to continue to scale johnny thanks for taking us to the top thanks very much for your time have a nice day