How Nowinteract CEO Magnus Astrom grew Nowinteract to $2.6M revenue and 19 customers in 2017.

this is the top where I interview entrepreneurs to our number one or number two new in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have i'm now at twenty thousand dollars per tough i haven't explained his havoc on global domination we just woke on a hundred thousand suitable mark and I'm your host Nathan lakha okay top tribe this week's winner of the one hundred dollars is dr. Virani the 22 22 year old apple and deploy and he's listening to the show and loving it for your chance when 100 bug every Monday and we scrub the project on itunes now and then check forward Nathan two three three four four four to prove that you did it Center folks many of you reached out to me and if they make them so many guest on your show talk about the importance of fashion but whenever I try them back you tell me that you go Nathan they don't book talks about time so you or they don't show up after they book it's frustrating the answers got you up use smart tools I use a tool called a cutie scheduling at Nathan lecture calm /schedule on please specifically how I use it later on in the episode Nathan lefty here at this episode 5 91 coming up tomorrow morning here to learn from Bugsy CEO they raised 1.2 million dollars and launches pricing to help you know why your mobile app crashes okay why your mobile app crashes it's kind of like hot jar for mobile devices with our seat with this video Alex tisha good morning guys Nathan Lackey here our guest this morning is magnets astral he's the founder and CEO of now interact a machine-learning stats platform for omni channel optimization he's also the founder of in lead a business consultant and sales operations company which was sold in 2010 and prior to that he was founder of prime log a transportation management SAS platform which was sold in 2006 magnets are you ready to take it to the top yes I'm ready so you've been doing this whole stash thing for a while huh yeah long before it cold says the first company Muslim with ASP application service provider so what would take it back real quick before we get into it now interact in 2006 prime log what did that platform do yeah we started that company 2000 right of the crash we have two here in Sweden I think we have a national crash as well but we started that company two thousand and what we did was you know connecting transportation providers with transportation buyers to help businesses to control their flow of goods in a better way and also the cost of the transportation and divide cost per package you know get better control and visibility over the of the logistics that was what we did and we started with the big you know bigger companies like Eric's on this case and those types of companies to get get started and before you sold it what was the trailing-twelve-month right now it was about two million to knock million roughly okay and who did you sell at you we sold it to a Swedish group that would building like a consultant groups combined with software so we sold it earlier than we you know and then the plan because the next the next the buyer was having a really really interesting plan and it turned out pretty well but now I think they sold most of the other businesses and no thanks we're primary is the core again so it's still running and well it's great what you tell for I don't know actually Tabo honest I don't remember it was awhile ago and I was quite heavily dilute diluted at that time so lemme do you have any soda i got enough to buy miss myself a big house and not have to worry about too much about you know costs and so that's that to get got me to the first step in the other entrepreneurial career and you know foundation to start you know the no comment why were you so deluded did you have a bunch of co-founders rearrange much capital or what I had a coup in both co-founders but we had the really really heavy heavy situation in Sweden at that time because we had a tremendous crash with blue calm and you know all the venture capital would totally out to the market and we we started the company basically a few days after that crash and I had seven employees on the very start I just bought a house with my family and you know everything was really really tough so we brought in money the money we could I brought in at very very low low low variation so much my dear eight and we raised roughly you know one and half million or something like that not more than that so there's no when he sold it did you have less than ten percent on the company roughly ten percent alright and in let's fast forward so after that you founded in lead weight in lead do and we were actually but the idea was to to help customers to sell to sea level instead of selling lower down in the organization we were helping them to get a hierarchical organization to get better deals and get it you know the better road map with the customers and so we had a method to do that and help customers do that but the idea behind it was to run those sales price processes for the customer in order to capture and get data about the decision making and their needs and start building a database across Europe and basically make money on that beta base instead of the sales process itself and we did pretty well but my voice pretty well yeah we returned it turned out to be too heavy on the consultant side so I decided to sell the company because it wouldn't be didn't turn out as a software play as i would like to it to be and the database itself were not as big as it should be so it ended up being more of a consulting business which I well it's interesting but it's not what I wanted it to be so I sold my share and went on to kannamma correct in question on on inly before we get to now interact what was the trailing-twelve-month revenue before you decide to tell you but this one and a half million in verse that was professional services tougher to the lawyers and that was function you know based on the time that we spend to customers that's all it wasn't fast forward now to now interact what does it do an addy make money so we are offering large businesses software based on machine learning algorithm errs to optimize the bridge between online channels in the compact center and we do that by personalizing how each visitor on the website is offered customer service channels like you know live chat phone numbers click the call options chat BOTS whatever the customers using we apply machine learning to offer the right channel to the right visitor which means that the customer gets or the our customer gets the best calls into the call center more sales online basically they're increasing their profits so if I'm if I'm paying now interact you might help me know that my last website visitor was from San Francisco so they maybe they like chat BOTS because you assume their tech savvy versus if someone visiting my website from the Midwest maybe you show them a number to call instead of a chat bot which might scare them that is an honor roughly right the real truth is that we are looking at very very detail on how they are behaving on the website so how they are clicking how they are scrolling the mouse movements and we combine that beta with you know call tracking we track chat to track conversations and chats and we combine that data and apply machine learning on it it turns out that you can tell quite a bit from just these footprints and really you know predict what's going to happen how to maximize the chance that we will sell so basically it's a deal right here you're taking on this data and help the salesperson close the deal yeah but it's more on in a business consumer perspective so our mice my wet dream is you know to get AT&T or Verizon or any of those big ones as a customer so they have you know millions of visitors on the website they don't want to have all these calls into the contact center they they want people to be able to self-serve buy online solve the customer service issues online but they know if they take away all the contact channels on the website phone numbers etc they will lose a lot of safes so they want to pick the you know that I don't know what you say in English but they want to have the state but get rid of the calls that is just call it's costing cost in the context and that's what we help them let you say your wet dream is to get AT&T paying you yes I love that all right what how do you make money so we make money selling to telcos insurance companies degree commerce companies you know energy companies travel companies and we deploy our technology and we have one group randomly chosen which is the target group where we do our thing our optimization and then we have one control group where we just crack and the customer can see with you know in the dashboard exactly how much profit we add by personalizing an optimized what's the business model is like hell there is a sauce model with the pay per month but the fee fee is based on the value that we deliver okay so on average the average customer of hanging per month 10k per month okay and and then let's take let's kind of go back a little bit a little bit so what you're just down the company in two thousand of them 2010 rnm you to have you kind of cell phone interview raise capital so we we we raised about 100k in total and now in the beginning and then we built the first version or the first product and we took it to 109 PK in monthly revenue but that product was not available enough what they did you hit aren't like how many years in mr on over november 20 2012 but that product that we had at that time was too simple and we went international we pounded in sweden and when we started the UK and the Netherlands we found that this product is not scalable enough the competition is too hard too is decided to do with people and with that 2014 we launched this product that we have right now which is based on machine learning and it's channel agnostic and works on top of our on other products and now we have 19 customers on that product and we are on a mr of 220 k then and what it is so how much to pilate raised we have raised seven million we just great the series around and got the money on the count you know late november as total 7k total yes sorry status or seven million onions because yes that includes money raised like including the previous round yes we did two million in total in a couple of see drones and then now we did in a round with family near owner so you do the five million a round recently talked to me about a kind of churn do you have any have any or customers on your new products churned and yeah one has earned until and blows to an off year so we have lost one customer okay so so pretty low and what is your kind of team size currently we have 20 people in the team fifty percent this R&D data scientists and developers and and the rest is divided with divided 50-50 between states and marketing and customer success and where you guys based we basically have the headquarter and R&D in stockholm and we have most of the sales people in the UK and the Netherlands for the moment and we are just about to start our business in the US and what's it cost you to acquire a new customer throat okay okay and where are you spending that money typically it's about two thirds on sales and one-third of marketing ruffling okay when you say two turds on sales like II mean like say they say the sales salaries are the people that close that deal yes correct so we have like videos and we have saved people making the customers and then what is it when you say one-third of its marketing where are you spending that 10k it's mostly complete marketing it's very targeted marketing because we have a quite you know targeted audience that we need to talk to and so it's mostly content marketing events and such into how much are you spending on that canister per month currently currently not too much because we just raised the money we haven't ramped up yet but for the year we are looking to spend roughly well half a million or something like that isn't not too much so it's quite like on marketing sales played a lot yeah so you're hoping to be spend half a million at ten just on marketing and you spent about 10 grand agree new customer just for marketing you hope to get about 50 new clients at a ten-thousand-dollar air ar-ar-ar-ar boo corrective yeah interesting very cool so there's that word the majority that well erase 5 million and use only 500 k over there where's the rest of my ain't going to go or a lot of that a majority of it some is going to be invested in or D but most of it in sales and we are I mean for us as the European companies quite big things to go across the Atlantic and store the US operations and hire people in the US and I will move there myself so the budget for that expansion is taking most of the funding bonus so that's where we put the money and if you see dealer takes to get AT&T yeah there you go he said it you said 2012 ahead about under 90 k and m RR if you just fast-forward give us the last two years and 2015 what was total revenue so 2 2015 2016 has been a lot about shifting out the old product and replacing it with a new one yeah because we we have we had a call substantial revenue from the old product which is not you know what we want going forward so we have been like you know an growth rate law about twenty percent if you look top line but we the new prada has been growing almost humberston do a year last show you revenue i have to think about here and calculate so it's three and a half million okay and that's between the old product winding down and the new product winding up yes so we have been part of quite flat on the revenue growth if you look top line but it's all about shifting from the old one and the new new product raise the the five million what valuation you do that had you negotiate that we took in the money think it's about 13 14 million pre-money okay and I've been around for a while I raised money before and I know it's not about you know getting best valuations about the terms and at the end of the day I want to meet baby to meet with the investors on you know taking coffee and a one time to be happy with investment because I will I will always be well off regardless if if I get this or that valuation if I succeed so it's all about you know you have different stakeholders you have employees you have the dusters you have the customers and you have to balance between them sorry I've been around so long so I know what's important so the evaluation it's as such it's not the most important whether the top three terms that you got in a term sheet that are most important it's the preference structure I mean if you have to sell that they're at the lower level what happened then it's about the locking how how hard or you locked in as an entrepreneur you mean that think it is in a clear way yes exactly and it's not about you know leaving the company's about having that as a person negotiate something to negotiate with so that's basically and also the type of investor you want to have is it you know 100k in 100 times money and duster and they fail 99 out of 100 times or is it someone who really doesn't want to lose their money because i have three four chances in my life then that's the same investing you know hundreds of companies that they don't really care fewer than entails but i would care if now with Greg sales so I have to have the right investor I know what it is you know like to have the wrong no more because I get asked all the time Nathan that you hosts all these interviews hundreds of them per month how do you do them efficiently and guys answer is simple people always agree to my calendar back-to-back meetings I dodged my injuries to stay very efficient and the way that I do it is I use a tool called acuity scheduling at Nathan let it calm /schedule and the reason I use them is very simple keep my no-show rate the very low because they send out reminders of when the interview where the meeting is coming up and also they make it very easy to schedule time right let's go back and forth via email 10,000 times with people I'm trying to meet with an 8th alexa.com /schedule help clean so much and by the way look I you like have so many meetings I'm the best of meetings okay I do them back-to-back very very efficient do you guys know me many give us them the most efficient they've ever seen okay so i use this tool it's so efficient and by the way i got galvanized and gavin he's the CEO i said i want a great deal for my people he said nathan well most people get a 14-day trial is none great i said nope if you going to a 45 day free trial and nathan like a doctor on /schedule that's like a stay up forever to go get in now Nathan Alaska dot com /schedule very good magnets wrap up with the famous five number one with your favorite business book blue or subscribe today number two is their CEO you're following are studying right now well in Sweden you have to look at spotify but it's not our business so the answer is no I'm not coming up following an a in a specific field number 38 their favorite online tool you have like hostgator i would say linkedin produce boring answer but for me its linkedin member for yes you know you get eight hours of sleep every night yes and what's your situation married single you have kids I married have four kids Wow and how are you I'm a a bit more than 40 okay you got the kids working on the business yet know the oldest is 15 she's been actually with me at the office and often me why why why do you work why they try to get those customers you should go for these customers instead and awful year later we took that decision in the board so she's pretty clever teacher CEO yeah so last question magnets take us back 21 years what do you wish your 20 year old self knew I mean it's all about focus you have to focus you have to be persistent you have to you know that's when you're younger you're a little bit more unfocused and you you see a different option coming in a you spend too much time of distractions so that's something I would have you know wanted to know at that time job drive there you have it from Magnus the founder of now interact it's all about focus and being persistent launched the company founded the company back in 2010 pivoted after one or two years has a team of 20 today base between Stockholm UK and the Netherlands customer wise about 19 folks paying on average 10 grand per months doing around 220 granted monthly recurring revenue currently they spend about 30 grand to get a new customer did about 3.5 million bucks in 2016 revenue recently raised five million bucks on a 13 ish million-dollar pre-money valuation again focusing on investors that were in and it has invested in the company as a Magnus is Magnus thank you for taking us to this awesome thanks [Music] if you enjoy Magnus today go back and listen to the back yesterday he's a sea of particle kayo which was raised 14 million dollars has five million dollars in revenue and they're helping assure in the Internet of Things connectivity age they're connecting coffee makers like curing the internet and have four very interesting revenue stream the top drive I love giving away free money I feel like we're giving away cars I have something special for you today how many of you have heard our super sharp gasp to talk about success they've had with facebook and google ads well all of you listening right now if you're listening you get a hundred dollars in free AdWords here's how you get it okay again thanks for listening get the free hundred dollars from google right when you sign up with my website host provider hostgator go sign up now to get your free money hostgator com solar splash nathan again that's hostgator com forward slash Nathan ok so I'll tribe I'll see you bright and early tomorrow morning and don't forget before you listen to any other episodes subscribe on iTunes right now for your chance to win a hundred bucks every Monday [Music]