Ninety.iorevenue & funding

Introduction hello everyone my guest today is none other than mark abbott he's an entrepreneur ceo and coach with decades of experience across startups early stage small and mid-sized companies his track record includes generating over a billion dollars in gains for his investors his dual passion is not just teaching leadership teams how to build extraordinary productive humane and resilient companies but building every one of the cloud-based tools needed to make the associated journey journey extremely extremely easy mark you ready to take us to the top i am ready all right now you are building these tools for founders that you work with via 90.io that's n-i-n-e-t-y-dot io what's the company doing are you guys pure place ass we are pure play sas and we build an expanding collection of tools that helps people just build amazing companies so a bunch of different tools meeting tools planning tools goal setting tools feedback tools process management tools just an integrated and expanding collection of core tools people need to build extraordinarily productive humane and resilient companies when did you launch the company what year um we had our first beta users in team 21 2017 2017 okay and how many customers Currently serving 1920 customers are now paying for the platform today 1920 a very specific number that's great you're looking at the right dashboards walk be walk me before you get to 1920. you've got to get your first 100 where did you get your first 100 customers from uh so we i belong to a coaching network of uh of uh coaches that teach this thing called eos the entrepreneurial operating system and so approximately half of them probably came from other coaches and and how have you sort of codified the entrepreneur operating system and why you sort of why didn't anyone else do this yeah so actually um there's a long story but we're not the only ones who have done it so there's another company company out there that has a collection of tools that also complement eos but um i actually started thinking about the big idea almost 15 years ago and then um became familiar with the community about 10 years ago and uh and then started really working on the software about seven years ago and how much do these customers pay you on average per month yeah so the average company is paying close to 140 per month okay 140 per month and has it always been that way or are you moving upstream or downstream yeah so the basic way it works is we charge on a per seat basis so it starts at 12 and then as the companies put more and more seats on the system the price declines all the way down to three bucks if they have you know hundreds of of people using subscribing to the system and mark with 1 920 customers paying for Monthly recurring revenue 90. io today at 140 per month what does that mean in terms of what you're doing in monthly recurring revenue yeah we're virtually at 250 250 that's obviously it's a great place to be it's even more impressive if Bootstrapped you've done this bootstrap have you raised have not oh we love we love that i love that answer so what's enabled you to get i mean 1900 customers you started off with the eos community how are you getting customers today yeah we're probably um it's i want to say it's close to 50 50 um in terms of people that are coming out of the community working with another coach and then you know people who are hearing about it through organizations like um eo right the entrepreneur's organization vistage ypo i'm hearing about it from friends we're global you know so um there's there are a lot of communities out there that support entrepreneurs and uh and we seem to be um catching on so what else is there anything else you upsell them besides the the sort of the operating platform tools because once you start getting the thousands of customers up selling even one or two additional tools to increase arpu by five to ten bucks per month it means a big difference to obviously revenue yeah let's just say i have a five-year product build-out road map and we know we know we need to do that we have additional tools that are coming out okay fair enough now are you burning cash today are you profitable um well we could be profitable but we're burning okay how aggressively are you burning obviously you're reinvesting in growth you're talking like 100 net burn per month or less um somewhere between 50 and 100 okay fair enough and where is most that capital getting invested it is invested for we started putting almost all of our money in engineering really didn't do a lot in terms of marketing and we're just getting going in marketing we're also now investing in uh in data so we've actually hired a head of data and so we're starting to you know build out um things we're also working on um so those are the big things right so client success cost whatever it costs engineering then we're building out you know with a pretty decent long-term road map and then we're starting to put money in marketing and into data and mark how many engineers are on the on the team um probably around 12 12 and what's a total team size oh it's um gotta be over 20 less than 25 20. okay got it and do you i mean this price point is a little bit tricky right because 140 a month is not big enough where you can afford to do high-touch sales because they're not big enough contracts but it's also sort of on the expensive side in terms of just being a credit card swipe no touch on a website do you have quota carrying sales reps we have zero sales people okay do you have anyone in sort of customer support or or are people really just swiping without any demo no calls or anything just swiping a credit card on your website no we absolutely have a client success team and we're available to do demos as well as we make it really easy for people to look at videos the software is super intuitive so percentage of demos um to total trials has probably declined by 50 70 percent over the last couple of years okay and now do you do you in terms of growing the platform do you have plans to raise capital are you just funding this from your own your own cash currently well i've i've predominantly funded it myself and then we're to the point now as you know we can start to raise some capital in terms of debt so we're gonna do debt and then um you know it's possible someday that we'll do equity uh i love having control so that's part of the story here right yeah mark you strike me as a control freak which is a big compliment i love control freaks they they then have the total freedom to just build their vision and usually that's where you end up with the best results so i love that when you say you're going to do debt what does that mean how much debt capital would you raise we're um talking to several groups right now about a couple million okay so okay guys so like well i guess let me ask be specific will you raise more than 1x your ar in debt no okay so it'll be below 2.5 you know 2.8 million in terms of total debt you raise correct and how cheaply do you think you can get the debt uh as i said we're in conversations right now um you know honestly honestly i have not been as involved as my uh my head of finance has been so i you know i've got a gut for it but i don't really know yeah yeah interesting and why use debt over equity is it really just a control thing dilution control um got a very clear sort of vision as to where we want to take this thing and um you know so so it's it's it's all about just uh staying focused and and frankly you know i there's a lot of time needs to go into if you want to go raise equity and right now we're you know we're running 90 120 miles per hour just doing what we need to do and so as far as uh you know just allocating my scarce time that's not something i really want to put a lot of effort into right now and back to being control we're going to do it we're going to do it well mark i'm going to make a big statement in a second but i want to know churn first in this sort of price point chern can sometimes ask you what's your gross revenue term like it looks like annually um it's a great question it's come down and come down right now let trailing 13 weeks i almost don't want to say this nathan um but trailing 13 weeks were less than four percent annualized okay uh less than four percent annualized so you're taking 13 weeks times four or five-ish and annualized it's about four percent yeah and do you have expand meaningful sort of upsell and expansion revenue yet uh so you have net revenue retention above 100 140 what are you up selling it's not it's just more and more seats right so they start off with a limited number of seats and then we you know we built it so that over time it becomes really apparent that it's really smart to start cascading down the tools to other people in the company so across your 1920 customers when you look at how they will probably perform the next 12 months relative to the past 12 months performance you expect about four percent of them to churn in terms of revenue churn but 45 of them will expand new seats etc leading to net revenue retention of 140 just on your historical cohorts is that accurate not net revenue retention that's expansion so you you take the 140 less the plus the four percent but you're close right well no i'm not close if if expansion is 140 percent and churns four percent your net revenue retention then would be like 136 sorry 236 percent not 140 136 percent so let's let's just say so you start off with 100 right and then you go to 140 and then of the original hundred dollars we lose four yes so i was got it so i was right yeah yeah so you're 36 yeah yeah so you're i was right your net revenue retention is between 136 and 140 percent great yeah okay got it now let's talk about new user acquisition for a second what's it cost you in terms of fully weighted cac to get a new 140 a month Customer acquisition cost customer it's interesting right and i don't believe the numbers right now they're way too low um and it's a part it's a combination of the you know the fact that we have this great community um so we don't own the community we're not on the community no no we're just members up but if you pull if you pull that number out it looks like our payback period right now because we have not put that much effort into marketing our payback period is literally less than three months got it so you're spending like 300 400 bucks to get into non-community based it's lower than that but i don't even like going there right yep yep well so let me ask you a question then uh you know i built founder path so that founders could click a couple buttons and raise debt without having to go and raise it do a big process sign a bunch of you know term notes you know understand revenue based financing true interest rates we have 50 million deploying to founders we'll have 10 million out here by the end of the month uh i'd love to do that deal with you okay let's talk is the number you're looking for again you said less than 2.5 million is really what you want uh the tricky thing with debt is the second you take it you're paying some sort of interest on it unless you get a big interest-free interest-only period so how much cash do you think if you had today you could deploy it in the next 30 days how much cash could we deploy in the next 30 days um well in the next 30 days the i mean we're just you know our expenses are our expenses so i'm not quite sure i'm tracking with you i wouldn't i wouldn't deploy a million dollars in the next 30 days that's for sure i would deploy over over a period of time but well this is something that a lot of founders don't think about when they think about raising debt when you raise debt uh depending on the facility you raise on you're paying interest on it even if it's sitting in your bank so you want to as closely correlate when you're actually investing the debt dollars to when you're actually drawing the debt so that you're not paying interest on unused capital right agree with that not all not all the deals we are looking at we have to draw down got it so you're looking at some sort of line you know credit line products right where you've got you know you can take down whatever yeah i see i see very interesting well we'll talk offline more about if we can do a deal together on founderpath.com you're the exact sort of company that we do these sorts of deals with so we'll chat more about that later in the meantime though congrats on the growth let's wrap up here with the famous five number one favorite business book um i have there's so many right but i'll go with traction just because that's for everything we do so attraction by gino whitman number two is there a ceo you're following or studying there really isn't number three what's your favorite online tool for building your company besides your own besides our own um that's a good i don't really have a good good answer um i i honestly don't i mean we you know we we use hubspot and intercom love them both number four how many hours of sleep to get every night probably real sleep is is is six but i'm in bed seven plus and what's your situation mark married single kids married with a 21 year old boy okay and how old are you i am 60. 60. last question what's something you wish you knew when you were 20. um i love right where i am i wouldn't change a damn thing so no no one writes no it's not a regret thing it's more like when you're sitting down with your boy what's something you're telling him in terms of life and business yeah no there's a lot of stuff um that we talk about in terms of life and business uh you know i think the key one of the keys to success is having a very long-term oriented perspective on everything you're doing very good and hey speaking of long-term i didn't ask you this but you're out of call doing 250 000 a month right now where were you about a year ago so we can understand growth rate yeah um last uh july we were at 65 000 okay so joey you know we're obviously recording this in october so last october you were doing what like 70 80 000 a month probably somewhere in there okay very good eight let's just call it yeah health obviously healthy growth so call it a million dollar run right up to a 3.2 million dollar run rate today again guys 90. io they built the bat they built on the back of a community called eos entrepreneur operating system they they now built these tools to help teams actually measure these goals make the vision get to work and then obviously keep people accountable for what they committed to in those goals scaling nicely with 1920 customers mark thanks for taking us to the top you're welcome 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 news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya