Nameshouts Revenue & Valuation (2019)

hello everybody my guest today is noreen anwar she is the founder and ceo of name shouts a startup whose entire purpose is to help people pronounce names correctly before starting the company she was working as a software developer at sap she loves building tools that help people noreen you ready to take us to the top absolutely yes okay people are going to hear this and they go wait is this like a gimmicky thing or is it a real business first off why is this tool needed so um basically we were we have been trying to figure that out for years that whether it's a gimmicky tool or is it a business so um i kind of started this when i was like working as a software developer at a german company and i was really mispronouncing and butchering european names and i was googling name pronunciations and you know google translated sometimes work it doesn't sometimes it doesn't work and for for me personally and as well as for my co-founder we thought that names are just like there's just so fundamental to everyone like why don't we have a simple tool that can help us you know pronounce names correctly so long story short uh we've been going on it for years it's it's actually pretty difficult to build because a database of name pronunciation doesn't exist for the languages and we found out that actually for businesses especially in today's world especially for sales calls like if you're cold calling someone if you mispronounce a client's name you get immediately hang up on so there are actually business implications um for mispronunciation and i think one story that really surprised me was that a nike uh like one of the reasons why nike lost stephen curry's deal was because the rep was mispronouncing his name during the pitch and his family thought it was disrespectful so it was like 14 billion dollars like one of the key reasons was name is pronunciation that's interesting okay so let's talk about if it's a real business or not right so what's the average customer paying per month to use your technology so we have like we have currently three different ways to use the website uh so first well the three different ways to use name shelves the first one is the web app where you can like search for like 10 names per month for free and then the second one is our chrome extension which is still in beta relatively new and the third one is our api so for the the web app like the average customer pays around twenty dollars and uh for the api like it varies from 100 to the highest paying as 500 dollars and but you think 20 is the average across your entire customer base so again like uh our our conversion rate is very low compared to the number of free users that we have so the people that have conversations sorry just among your customers if you take your total revenue now and divide by your customers you think that'll be about 20 bucks a customer it would be a little bit more okay okay good and i'm trying to figure out why because on your pricing page there's a four dollar nine dollar nineteen dollar a month plan so you're saying the average is essentially more than your highest price plan i assume that's because your api model exactly yes exactly yeah interesting okay um when you launch the company what year so it was uh 2015. well the the product was a side side project for a long time but we officially incorporated in around february 2015. okay 2015. that's great and then um how long did it take you or how much money did you spend building the mvp we didn't really spend a lot of money uh because like most of our initial you know like people were free so it was like almost like less than two thousand dollars actually less than that okay two grand and then how many customers are you serving now today right now in total like for our web app it's it's a freemium model so it's like around 167 and for our website for our api it's eight okay so you have eight paying customers today across the entire company yes okay good so eight customers 20 bucks a month to do about 160 a month right now in revenue uh so it's like so in average it's around 4.2 k per month on revenue right now so it's uh basically because we have hundreds of users for the web app and for the the api well my audience won't care about web app versus api i'm just trying to understand revenue metrics right so so how many total paying customers do you have that make up the 4 200 per month i think around well it's 170 180 175. okay something like that got it okay so now we can essentially take like the 170 times something like 20 or 30 dollars per month and that gets you the again the 4 000 ish per month in revenue exactly yeah okay that makes sense how did you get your first 10 customers do you remember uh well it was actually mostly inbound so how'd they find you though it doesn't just magically happen so it's if you google name pronunciation api you're like one of the first in seos and then they find us out they try it so it's a self-serve model how did you so the only one above you is pronouncednames.com right how did you how did i mean are you do you have some experience in seo how did you know how to rank this high so we we basically the the thing is the competition in this in this space and then this keyword is really low but we did like we do have like some blog posts like hey these are like the most commonly mispronounced japanese names and i think that helped us rank higher as well as the game of thrones and the harry potter names a lot oh that's interesting so though you put out articles that basically said how to pronounce all those names exactly yes of kind of popular tv shows and things yes and i think that over time it helped us rank higher but uh also like in terms of as i said like a database of name pronunciation it doesn't yet exist so i think that also helps but in terms of pronounced names i think the reason why they're high ranked higher is because they have like a youtube channel where they get a lot of seo as well sure yeah now you're doing 4200 a month today on average where were you a year ago were you pre-revenue uh no we weren't pre-revenue we're doing like a hundred dollars per month we had one customer okay and what's your team size today how many people uh it's three full-time with the two co-founders that's myself and my co-founder okay so how are you guys all supporting yourself on four thousand dollars a month in revenue so we are before like so we finally we did an accelerator program so right now we raised like 125 000 canadian dollars and uh we are going to raise our seed round uh in terms of supporting ourselves we were like i'm a software developer so i worked as a contractor and my co-founder she had uh she had a part-time job so are you guys both full-time now yes we are okay so like we have been full-time for the most part but it's just that we were trying to kind of keep afloat yep we are based out of canada so it's like how much money are you burning today monthly around 6k monthly okay about six okay good so how much do you have some runway left in the bank yes i we would say like we want to kind of increase our spending to work on the product and the name so it's like we're giving ourselves eight to nine months of runway and then when you raise how much do you hope to raise uh we at a minimum of seven hundred and fifty thousand dollars and do you think you'll be able to do that with forty thousand dollars a month in ar right now four thousand dollars sorry forty thousand dollars a year uh well the thing is we have two pilots uh one with a contact center and like one with the like an airline so we think that those will be substantially more useful and if once they do convert it will be it will ramp up our pricing a lot more do you have a sense of churn over the last 12 months how many people d you have stopped paying as much or stopped paying altogether uh not there hasn't been less there has been less than 10 people who actually like stop subscribing so people have kept subscribing maybe because it's not as expensive of a add-on so okay but so 10 out of 170 so you have like you know less than five percent annual churn right what are you spending to get new customers fully weighted uh we are still trying to figure that out so one thing that we know that works a lot for us is really adding more names to name shouts um that's what does that mean like making the database bigger exactly like because we we didn't have english for a long time and our customers was requesting english but we thought that that people would know how to pronounce english names but turns out once we added english that's when we like got our growth curve so right now we have a lot of like 40 000 free users and we want to like uh pretty much convert them into what does that mean what does a user mean so forty thousand free users so it's website users they usually yeah but user based off what they logged on once over the past year or they actually looked up one name over the past week our retention over like a 16 week period is around five percent so yeah but sorry irene we don't know how you define retention is it a login is it a name lookup is it five name lookups in a week it's uh so it's a it's uh it's at least three names per week so three name lookup per week okay so how many what percent of the forty thousand do that that's around five percent yeah okay so ten percent would be four thousand so about two thousand look up at least three names per week okay and where the paywall obviously right now you have you know at ten names have you considered moving the paywall down to two names so that those 2 000 hit the paywall and you'll see what convert we are actually thinking of really making it because the we think that we want to make it actually increase it to 50 names because we want people to use us more so one of the things is that a lot of our users right now are enterprise users and they're coming from like some of the biggest companies in the world however this is as you said a niche too and we think that people first need to kind of get used to like using name shouts you know and so once they do that that's when we want to increase pricing so as a company we're really focused on getting our monthly active users to like more like to keep that growth rate growing going that makes sense i think it makes total sense all right let's wrap up here with the famous five number one what's your favorite business book uh getting things done i guess number two is there a ceo you're following or studying uh catherine menchu from the muse yep she's great number three what's your favorite online tool for building your business asana i love asana number four how many hours of sleep to get every night uh seven and how old are you uh 32 32 okay and um what's your situation married single kids uh not married okay no kids all right last question what do you wish your 20 year old self knew well i wish my 20 year old that it's going to be a lot harder than it seems but keep at it and you'll have a ton of fun yup guys it's harder than it looks there you have it name shouts with noreen again she helps people pronounce names more accurately this is great for outbound sales calls when you usually get hung up on a cold coffee mispronounced name they're doing 4 200 a month right now in revenue up from 100 a month just a year ago so obviously early on they raised 125 000 burning about 6 000 per month team of 370 customers again founded in 2015 now looking at scaling hopefully raising a seat of 750 000 minimum in the next call it two or three quarters noreen thanks for taking us to the top thank you thanks a lot