Norby Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Nick Gerard. He's a lifelong creator and bill builder as well as a former Microsoft software engineer and PM. He holds degrees in music, computer science, and electrical engineering from the University of Michigan, where he also launched his first startup while still a student. Before founding his current company, norby, he consulted for numerous early stage companies and helped launch a viral online community at the start of the COVID nineteen pandemic. Again, [00:20] now building norby.live, a marketing platform for creators. Nick, you ready to take us to top? [00:26] >> Yeah. Thanks for having me. [00:27] You bet. Okay. So you sound like a triple threat. You have empathy for music. You can code from computer science. You you're in the weeds because you you ran an agency launch side projects. So norby's gonna be big, [00:38] >> That's the idea. The first startup I ever started actually was a was a music startup. I think that was the one I I did in college. And we built it for DJs and it was about collaborating like building collaborative playlists and playing music together in real time. And the goal for me has always been to figure out a way to marry those two things, to figure out a way to build products and services for people in [01:00] >> creative worlds, and that's really carried me through most of my twenties. [01:04] Very cool. Okay. So norby. Live is the tool today. Help me understand who's paying you and what they're paying on average per month if you have customers. [01:13] >> Yeah. So we have two tiers called the creator tier and the brand tier. The creator tier is $5 a month tier and the brand tier is $20 a month. And you can basically think of norby as like if you took Linktree, Mailchimp, Flodesk, Leadpages, and Community and smooshed them all together. All those things that people set up super complicated Zapier flows to wire together to build their online presence, put all those in one place, you brand [01:34] >> everything one time, it looks right in all different places. Everything is built to work together. So you don't need to hook a bunch of different services together. Usually, can simplify people's stack, you know, take a lot of the daily tax out of their operations and also usually save the money. [01:47] I use a lot of those tools and I'm just thinking off the top of my head, my last bill from each of them altogether probably somewhere around a thousand bucks a month. I would never believe that you could do everything they do for $5 a month to the point where I would never even sign up for your tool at $5 a month because I just I wouldn't think it's possible that you actually can do that. [02:02] >> Yeah. Well, I mean, I'm not gonna sit here and pretend that, you know, our our newsletter and email features does everything that Mailchimp does. We are a company that is eleven months old. But what we actually found is most people don't use all the features that a tool like Mailchimp offers. Mailchimp is, you know, an email provider to end all email providers. It's trying to be everything to everyone at the same time. And so if you [02:23] >> look at the average spend, you know, most people are spending $65 to $70 a month on Mailchimp. People, you know, who kinda fall into this category, and they're not getting most of that value from a tool like that. That's actually why tools like Flodesk have started to crop up and take some of that market share away. We learned all of this because we built a community ourselves. Like, the genesis of norby was myself and my two cofounders [02:47] >> the very beginning of the pandemic, built an online community that went like semi viral overnight. We had tens of thousands of people, engaging with this thing, and all of a sudden we had to build a lot of stuff and coordinate a lot of things. We were hosting events on different platforms and we had email lists and we had SMS lists and we were spinning up landing pages and sign ups and all this stuff all the time [03:07] >> and we experienced firsthand what it is like to try to build and manage this kind of operation day to day. And so we started out just building tools for ourselves, just solving for our own use cases. Like, we need a link in bio, we wanna be able to do text messages. Oh, we're doing an event collab with this other community over here, let's build the ability to host events. And so it just started very organically with [03:30] >> our own needs, building for the use cases that we encountered. And then because we were working with other creators, other community builders, other brands, they started being like, hey, can we use those tools that you're building? Because we're doing exactly the same thing. And so it kinda just grew from there. And so everything that we have built has come from the mouths of our paying customers from day one. Many are you having out today? [03:52] How many paying customers? [03:53] >> I'm not I'm not gonna get into like all the the details on it. I'll say that we have hundreds of paying customers. We're keeping we have a we have thousands of people on our wait list. We're keeping a wait list. We're basically still in beta right now and and starting to open it up to the world in q one next year. [04:09] Mhmm. So I mean, 200 customers at $5 a pop. I mean, you're doing something like a thousand bucks a month right now in revenue? [04:15] >> More than that. Because we also have the $20 a month tier. [04:18] I see. I see. But I imagine well, there's probably only a handful though on that. Right? [04:22] >> It's pretty evenly split, actually. I I would say we have we have probably three distinct cohorts. We have individual creators and influencers who I would actually define separately. I think influencers probably make most of their money from brand partnerships and and sponsored posts and sponsored content. Creators are people who are directly monetizing their audience, selling subscriptions, selling contents, you know, tips, and that kind of thing. So we have those individual creators. They're very well suited to [04:50] >> our $5 a month tier. Then we have what I would call community builders. You know, they may be people with a business objective. Maybe they have a shop or something. Maybe they have a paid membership community. They might be an activist. Maybe they have a Mighty Networks. Maybe they have a Facebook groups Got it. Set up. Maybe they have a Slack or something like that. And then we have brands. We have e com operations that are, [05:09] >> you know, d to c Instagram brands that are, you know, building text message lists and doing promos and they have an email newsletter and they need a link in bio and then they're doing collabs with other brands, and they do it at clubhouse Yep. Understood. And that kind of thing. [05:22] So so so 200 maybe multiplied times like 10 or 15 a month on average instead of five. You're doing a couple thousand bucks a month in revenue. [05:27] >> Right? Is is sort of where you're at today? [05:29] Sure. And and where were you a year ago? Did you have any revenue a year ago or no? [05:33] >> We did not. So we started this. We went full time on this at the very tail end of 2020, myself and my two co founders. And until this summer, it [05:43] was just the three of us. [05:44] >> And we were just building these tools slowly, starting to pick up our because we had built our own community, we had a great network of kind of early people to test concepts with and get feedback from and get prototypes to. So we spent a lot of the spring doing that and kinda took the wraps off in the summer and unveiled our website and started doing events and activations with our own customers, co hosting things. [06:11] Understood. And [06:12] >> then we we we raised around the funding in July and we've been, you know, building out the team since then. [06:17] The three co founders, you guys just split everything evenly? Thirty three thirty three thirty three at the start? [06:23] >> Not exactly, but ballpark. Yeah. [06:26] And and why not exact? I mean, I asked this because it's the toughest conversation you'll have as you're launching a company. So tell share with us share share what you can. Why didn't you do it evenly? [06:34] >> Sure. I mean, we had a very candid conversation with each other about what all of our strengths were and what we brought to the table. And I think the three of us have all known each other for several years. There's a lot of mutual respect and trust, and we one of the things that I love about our partnership is how complementary it is. We come from very different backgrounds. I'm a tech and product person. You know, [06:57] >> I was a software engineer. I was a PM. [07:01] >> Did all the things that go in it. You know, I've I've built software. I've marketed software. I've done product design, all of those kinds of things. [07:07] So so you own the most then of the three? [07:11] >> I I I am the CEO. Yes. As as the CEO, I own the most of the three. [07:15] And Yeah. Well, those things aren't always correlated. There's just because Sure. Has the title CEO doesn't mean you own the most. So I'm just curious. So you own the most because of the skill set you brought to the table. The others maybe own a little bit less. Yeah. Fair. Okay. Cool. Talk to me about the round you raised. How much did you raise this year? [07:30] >> So we raised just under $4,000,000, in July. And we basically set a cap for ourselves about how much of the company we wanted to give away, and said this is no further. [07:41] And What was that cap? I mean, most people in the seed or pre seed are selling 20% or so. [07:46] >> Yeah. Basically that. Got it. And we, you know, we kicked off we we took the wraps off of our product in May. We started doing, as I said, a whole bunch of events and activations with our own customers. That we have found is, like, an incredible way to fill the top of our funnel. Every time we do an event, every time we do programming or anything of that kind, we get hundreds of sign ups. We have [08:11] >> never lacked for sign ups. We've from before we even launched or had a product, we've had a wait list. So we started doing that. It went super well. We were kind of feeling out how we wanted to structure the company from here and decided that we wanted to raise a round. So we started fundraising at the very end of April or at the beginning of May. It took us about [08:37] >> took us about four to five weeks to get [08:41] >> offers that we were interested in on the table, and then a couple weeks after that to get things closed. [08:46] What did you do? That's not easy. What did you do in the first four to five weeks to generate that kind of demand? [08:52] >> Yeah. The first two weeks, I talked mostly to people that I didn't really care if I won or lost because I'd never done this before. And I just did like eight meetings a day for two weeks and just, you know, practiced and fell on my face a lot and got a lot of very quick no's, and learned how to tell the story of what we were doing and why it was important and what the opportunity was. [09:19] >> I I We are obviously all true believers and, you know, think that there's a huge huge market here and a massive opportunity over the next couple of years, but we're we're all first time founders. None of us have done this before. And so just learning structurally how to tell a story about where you are and where you're going, how you've gotten where you are and and why that makes sense, and how that leads into a natural [09:40] >> trajectory toward the next one, three, and five years. Practice. Practice, practice, practice. And for me at least, nothing beats learning on the job. Just going out and doing it, and it's it can be crushing because you fail very quickly. But we we designed it so that, like, we I I did a bunch of cold outreach, hit up everyone who I could who, you know, could make an introduction or whatever, teed up as many interviews as I [10:08] >> could, and saved the best for last. And tried to generate, you know, we at the same time were taking off the wraps off of our products. We were able to generate a lot of buzz around all the things that we were doing, and obviously that caught people's eye at the same time, and that helped. And so by the time we got to the third and fourth week, had a couple solid candidates. We had term sheets going [10:30] >> into, the end of end of May, beginning of June. And then, you know, a couple weeks later, we had the round locked down, had a couple other people falling on board, and we wound up closing it just after July 4. [10:43] Mhmm. Talk to me about Notation. I think they I mean, they were your first capital in, right, in 2020? [10:47] >> Yep. Yeah. So they allowed us to go full time. We raised honestly, we raised, like, $500,000. I see. And that was basically just so that Sam, Steve, and I could go full time. Mhmm. And that was [11:00] >> really, I I I mean, they I have nothing but amazing things to say about them. [11:04] Did Notation help you build your pipeline for the seed? Did they introduce you to a bunch of investors to drive that demand? [11:09] >> They made some of those intros as well. Yes. Mhmm. But it really came from, like [11:14] Did you close or that was did was the gradient introduction from notation? [11:17] >> No. It was not. That was actually from I actually don't know who made that introduction. I could look it up and get back to you on that. But, you know, it's learning, especially as an engineer coming from the I my natural kind of tendency is toward being very literal minded. I'll explain to you exactly what something does and how it does it. And learning to kind of break out of that into the kind of necessary shamelessness [11:40] >> of being a CEO, a fundraiser, a salesperson, and just being willing to ask people for favors, being willing to, you know, just [11:52] >> reach out cold to people who are scary to you. [11:55] What was the subject line? Judge you. Emailed investors cold. What was the subject line? [11:59] >> I could go back I could go back and find some of them. Some of them, what I would do is, because we had we had built our own community, I would drop links to things that we had done, or I would I would post a link to an event that we had done, or I would post a link to, you know, a write up that we had gotten somewhere, or, you know, every single one of them [12:22] >> was individualized. That's one thing that but, like, I didn't just, like, copy and paste and do the same thing to a thousand different email addresses. I would do, you know, five minutes of research about the person that I was emailing, try to figure out something about them, write a subject line that tied in what we were doing and something that I thought might interest them, and then give them an interesting link to check out in the [12:39] >> email. Just one, don't, you know, bombard people with a million different things to look at, and keep it super super super short and casual. And that worked pretty well. [12:47] Building the the media brand. I mean, you have creators who share. I mean, this could be part of why you sort of got a premium valuation is because you have this sort of media brand going. [12:55] >> Yeah. Well, that was a very conscious decision. Think when we started out, you know, I think there is a very strong appetite right now, especially in our space. We kind of We're b to b SaaS, but we're also consumer in a way. We're selling to people who are used to consumer experiences. They are not enterprise customers, not even really mid market customers. Long tail creators, small businesses, that are used to using, you know, products and services [13:25] >> that that look more consumer than anything else. And I think the companies that are crushing it in that area tend to be ones that do a really good job of marrying tech and culture. You know, like strong software services tools with really well developed brands. You look at things [13:39] like I mean, you literally sell ads on your website in addition to this stuff. [13:44] >> And and you know what the inspiration for that was? Square. If you look at what they've done with their, you know, apparel line and their merch and just their development of their consumer brand despite the fact that they're primarily building tools for SMBs, it's incredible. And and I think those are the companies that are going to really win in this category over the next couple of years. And as I said, like, we have never had a [14:07] >> problem filling the top of our funnel. [14:08] That's how How many people on your wait list right now? [14:12] >> Over 4,000 that we're still working our way through. [14:15] Yep. How do you decide who to let in or not? [14:19] >> We're getting better and better at qualifying people. It's a bunch of different things. I will say that actually, one one of the questions I get sometimes is like, you know, how much does audience size play into it once people reach a certain audience size so they age out of your tools. And actually, it's not one of the big indicators for us. We have people on our platform who have millions of followers and we have people on [14:37] >> our platform who have 2,500 followers, but it's like a super tightly knit engaged community. That's not really the the kind of primary metric that we look at. There are bunch of other things that we look at. There are some defining characteristics of our customers. Usually they've been building this thing for a little while, they've got a setup, they're stitching together like nine different point solutions to build their online presence. They felt the pain. They're spending a [15:01] >> lot of money. They don't understand why it's so hard. That's, you know, that's our person. It's typically someone who's spread out across their own three, four, five, six different platforms. They're building this brand presence, this creator presence, this community across a bunch of different channels. Using all of these different tools. And we have a bunch of things that we look at in their usage and in their background and platforms that they're on to to qualify them. [15:21] Very cool. So nice growth. [15:22] Again, nothing to call it $23,000 a month in revenue. You raised 4,500,000 to date. Hopefully, most of that still [15:29] >> I'm just I'm not verifying that number, by the way, that $23,000 a month in in in revenue. I'll I'll say ballpark, you know, we got hundreds of customers, thousands of people on the wait list. Price point is $5 a month and $20 a month. Average of I'll say average revenue per customer per month is, like, $18 to $19. [15:49] Okay. Got it. So you have way more at the 20 than you do at the five. That's why I would pull the average up. [15:54] >> We also meter usage. So as you use more SMS and email through us, we do charge you more. So we have power users that we make $80, $90, $100 a month off of. [16:02] Oh, I see. Got it. Got it. So there's a base plus meter. Mhmm. Cool. Yeah. I mean, I I'm glad you said something because I'm looking at this going, god, I would not wanna be in a position. Like, clearly, I'm like, this guy must be a great storyteller to raise four on 20 with this small amount of revenue. So it's great. It sounds like you have more traction here than what I'm my math is multiplying and [16:20] and yielding, which is obviously good news. But several 100 customers I mean, you think you can break a thousand? We have, what, fifty days left in in 2021. Can you break a thousand paying customers by the end of the year or no? [16:31] >> I think we definitely could if we wanted to. It's a question we have spent [16:34] Oh, come on, Nick. That's such a silly answer. I mean, if you wanted to. Of course, you want [16:39] >> I'm saying that I'm saying that we have have a wait list that we are waiting to execute on because we have a lot of pieces that we're getting into place. And Mhmm. Like, for instance, in the last two months, we've tripled our conversion during our trial. We have an entirely paid product. We have no free tier, and we have tripled the number of people that we are converting in every in every cohort. So things like that [16:58] What does that mean though? You don't let them in unless they're a fit. Right? They're stuck on your wait list until you click a button and say, yes. Let them in. [17:05] >> Right. [17:06] So, I mean, if you're clicking yes, let them [17:08] >> in, and you're only [17:09] converting 30% of them, that to me would be a warning sign though because it means you're qualifying like, there's 60% of people you're saying, yes. They're fit, but then they don't convert. [17:17] >> Sure. But we're the the conversion is increasing more than we are qualifying people is what I'll say. We are converting a lot of the people who come. [17:25] I don't know what that means. [17:28] >> That means that when you do when you do the math out, we are we are refining we we are converting more than we are refining. Like, the conversion has gone up more than we have gated, like, the people where we are we are letting in. We obviously prioritize people who have large audiences, have existing followings, who wanna do things like brand partnerships or whatever. That's not the only criteria that we use. [17:50] Got it. I'm still not sure I follow, but I under I understand. You have a wait list. You're letting people in. Conversions are going up, which is great. What do you there's probably one or two things you know people have to do during the trial period so that you'd be increased likely that they do start paying. What are those one or two things? [18:06] >> So one of the key things that we track is when people come on, they they request an invite to norby. They tell us upfront what they're most interested in. There's usually a particular wedge that they come to us for. We marry a bunch of different functionality. Right? So we have landing pages. We have SMS. We have emails. We have event hosting. We have LinkedIn bio. We ask people in our onboarding flow, you know, what what are [18:26] >> you primarily interested in using norby for? And maybe they are they do a bunch of online events. They do a bunch events as they're marketing, they're looking for a better event management suite, or they've wanted to get into SMS, but you know, community starts at $100 to $150 bucks a month or whatever and it's expensive, and that's really the only consumer option, or whatever, they want a more customizable link in bio than Linktree, whatever it is. One [18:45] >> of the key things that we measure is when do they reach for a second tool. They told us that they came in for events and now they're sending text messages. They told us that they came in for link in bio, but then they realized they can do their newsletter through us. That time, how long does it take them to discover they can do a second part of their operation through us, and how how engaged are they [19:06] >> with that second feature? As soon as they reach for that and as soon as they soon as they reach for that tool, as soon as they reach a certain threshold of engagement, we know that we're gonna convert that person. So decreasing that time, increasing the discoverability of features, product education, tightening up that kind of onboarding experience during your trial has been really the focus for us for this Yeah. The last couple of months. [19:27] Makes sense. Hey. We're over time. Quick rapid fire things here. What's the team size today? How many people full time? [19:32] >> We're at eight full time now. [19:33] Eight. How many engineers? [19:35] >> We are at four engineers with another one starting next month. [19:40] Very cool. Plus you. Right? [19:41] >> Yes. [19:42] Nice. You still get to write code. You're still early enough. Alright. [19:46] >> I am. [19:46] >> I am. [19:47] Let's wrap up with the famous five, Nick. Number one, favorite book. [19:52] >> Favorite book of all time. [19:56] >> Transformative book for me in college was a book called Shantaram, about a guy who, basically ditches his life and goes and fights with the mujahideen in Afghanistan in the eighties. And it's a fascinating book about philosophy and values and what makes life worth it. [20:14] How do you say it again? [20:15] >> Shantaram, s h a n t a r a m. [20:20] >> Shantaram. Okay. Very cool. [20:21] Number two, is there a CEO you're following or studying? [20:24] >> Is there a CEO that I'm following or study studying? I mean, this might be a semi cliche answer, but I think Patrick Collison at Stripe, and just the long term vision that they have for that company, is is really incredible. I mentioned Square before. I think a lot of the things that they're doing are incredible, although I probably wouldn't put Jack Dorsey necessarily at the top of my list. [20:43] And number three, what's your favorite online tool for building norby? [20:47] >> What's my favorite online tool for building norby? Yep. [20:53] >> Across any particular dimension? [20:56] Just any tool. Whatever you use the most. [20:58] >> Any tool? We use HubSpot as our CRM. HubSpot is amazing. It's a you know, just putting a lot of our different operations in one place like that was a game changer for us. [21:07] Number four, how many hours of sleep do you get every night? [21:11] >> I try to get at least six. Sometimes I fail. [21:14] Alright. And what's your situation? Married, single, kids? [21:18] >> I'm single. I live with my I I'm technically single. I live with my long term girlfriend and our dog. [21:24] Very cool. So no kids. How old are you? [21:27] >> I'm turning 30 next year, big three o. [21:29] Very cool. 29. So last question, something you wish you knew when you were 20. [21:38] >> I've gotten this question a couple times lately, and I think the the biggest thing that I would tell myself at 20 is learn how to hang in a lot of different kinds of spaces. Learn how to talk to lots of different kinds of people from different kinds of backgrounds who are good at different things. Learn how to put people at ease and [21:57] >> hear people's stories. I think it's a really, really undervalued skill to be able to walk into a place and absorb instead of project. And so, yeah, learn to hang in lots of different kinds of spaces. [22:07] Guys, there you have it, norby. Easy way to put your link in your bio with SMS, newsletters, events, in one place. Super easy marketing. They have hundreds of paying customers that caught an average of $18 per month. They just launched caught back in 2020 with a $500,000 seed pre seed round that allowed Nick and his co founders go full time, then just raised a $4,000,000 seed, sold caught around 20% as a business as they look to [22:27] scale now with their team of eight. Nick, thanks for taking us to the top. [22:30] >> Yeah. Thank you so much, Nathan. [22:33] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 1PM [22:58] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big [23:21] 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 SaaS 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 [23:42] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and 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. [24:02] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.