How Mela CEO Francesco Putignano grew Mela to $1.7M revenue and 18 customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is francesco putinano he is an italian has lived in seven countries and speaks five languages he then became a nuclear engineer before getting an mba and working at a fast-growing ticketing marketplace he founded his current company mellow works with two of his best friends with the objective changing the way work is executed in heavy industry all right francesco you ready to take us to the top yes sure nathan thanks for having me so what does that mean the way work is executed in heavy industry um so if you think way the way heavy industry and heavy work is carried on you have systems to plan the work systems to account for the work but when you go in the field to execute the work you're usually still relying on paper and communication outside which is kept offline so when we say we want to change the way work is executed we want to uncover that black box which is execution and make it trackable uh and and transferable to what other systems companies are using and what does that mean i mean to name one of your customers and tell me how they use you um so think construction companies for example they use us to collaborate across stakeholders with multiple contractors or with their clients without having to exchange whatsapps emails prepare paper report or then go back to the office at the end of the day to gather all the information put it together and send it to their customer for example so they use a very conversational user-friendly platform to collaborate and communicate and then the platform does the rest the information is organized and you already have all the data there instead of having it together it put it together and creating the report now when you came on back in december of 2018 you had just landed your first customer that was paying a thousand dollars a month how many customers are you now working with today oh so now we have about 20 customers 20 customers and do they pay on average a thousand dollars per month uh no well uh the interesting part is that we have both enterprise customers and smaller customers so i would say the enterprise customers we have six of them right now pay an average of 25 000 a year which would be around 2000 a month even if they pay on a yearly contract well then we have a dozen smaller customers that pay about a thousand two thousand a year so we have two buckets of customers that are very different in terms of the type of revenue they brings and the type of way they use the system so if you're an enterprise customer we provide you with a tool for the field which you can then connect with the rest of your suit of products if you're a small customer we are basically your erp if you're a three people construction company you can rely on melee to be your uh you know uh erp and managing your asset and your work so it's a two very different use cases which we address with the same exact product with different support and strategies so six enterprises at twenty five thousand dollars a year 150 000 in annual recurring revenue plus 12 smaller companies paying 2k per year another 24 000 dollars in ars you're doing about 175 000 in annual revenue right now yeah we're speaking euros so in dollars would be probably a bit like 190 10 000 something like that okay very good now what drove that growth i mean how did you go from one to 20 customers well um so the main focus because we're a small company so we the founders did all the bd and we focused on on medium larger enterprises so we do a lot of the work in the field ourselves to you know contact the companies and do uh outbound sales during the first year the interesting part was that lately once we started gaining some traction we started getting some inbound uh customers which are the smaller ones the ones with the smaller tickets we don't go after those they usually inbound and we sell to them so we gather them through you know google search a little bit uh linkedin marketing and what you're seeing is that again with very limited data that could be a big opportunity there in terms in terms of keeping the cost of acquisition at a few hundred dollars and the average uh yearly ticket at uh maybe 1500 so what we want to do going forward is bringing that part of the customers from being from amounting to about 10 15 of our revenues today to maybe 30 40 going forward uh because yeah we think it's a great opportunity especially if you're familiar with like some european countries there's hundreds of thousands of construction companies and service companies with less than 10 employees and we want to address that in a different way i mean we will keep the outbound because we enterprises like us and so we think we want to continue there but we we also want to invest in more like uh inbound francesco how many people are on the team today we're still six okay and how many of them are quota carrying reps uh it's the three founders uh so you guys sell yeah we it's still ourselves but uh because we've been so capital efficient we have a very low burn uh we got where we are with uh you know just the same six people we were a year ago uh now we are closing a bigger city investment uh how much are you looking to raise uh so yeah we're looking to raise between one and two million uh raised and you raised about 300 000 previously yes okay so we are now i mean we're actually closing the deal right now i can't comment uh a comment on that but do you think that will actually close considering the macroeconomic conditions literally i mean on the day that i'm interviewing you markets around the world are down 20 to 30 percent over over 50 you know you know month month month long highs fingers crossed it will i mean we're very close to the close we're far we're ahead in the process we're not trying to close it now we are really close to signing and so my my hope is every indication is that we will be able to close and uh of course i mean fingers crossed and you're based in sweden or italy uh we're gonna be based in italy we're gonna open an office uh that's the plan for this year okay so i mean again you you have to look at what's happening right now at the coronavirus in italy and go i mean do you how do i mean how is a ceo a bootstrap ceo oh not bootstrap but as a kind of new ceo less than three years old i mean how do you think about opening an office in italy which has just been obviously devastated with the rest of the world absolutely so i definitely expect a recession and probably sales cycle under enterprise site getting longer for sure and that's why i think that for us having a very low cost base will be critical once we close this round to plan forward we will be in this situation where we have a very low cost base and some cash that would have lasted us like 18 24 months in any case even investing heavily but we will be in the situation where we don't have to make tough decision right away because we haven't i mean if we had closed around three four months ago now our cost base would have increased four or five-fold and all of a sudden we are in the situation where we might be the economy might be slowing down my opinion is that once we close this in next few weeks we'll be in a situation where we can weather the storm better and what are you what are you so you mentioned burn is now lower what are you now burning per month uh net uh we're burning less than 10k so we're spending like about yeah 25k yeah yeah you said last time you were on that net you were burning about eighteen thousand dollars per month now you're down to ten because your revenues increase and your expenses stayed the same uh yeah we increased the expense a little bit but more or less yeah okay and and so what about churn i mean do you have enough data yet to be able to look at what churn might might be we lost one customer representing 0.02 of the revenue it was like really how much per month is that in terms of revenue it was like uh 50 bucks per month okay so are you two are you too cheap i mean how do you know that customers wouldn't pay double or triple what you're currently charging if you've only had one very small customer churn very flexible in terms of what we allow people to pay because we're a startup we don't have like we have fixed pricing and a strategy but we're very flexible in terms of uh meeting the customer's uh willingness to pay so enterprise is different uh but we we are uh it's hard to find two customers that pay exactly the same amount because we give them like slightly different services and uh and functionalities so in that sense we are i mean we're not perfect but we we go towards uh charging what people are willing to pay i guess what i'm saying though is how do you test the limits of that right you right currently uh i mean they're definitely...