Onboard.io Revenue, Valuation & Funding (2024)

hello everyone my guest today is jeff epstein he's an investor mentor advisor and generally a huge fan of tech sports and business now along with all this he is now founder of onboardio that's onboard.io a b2b sas to stream on onboarding for every customer he previously founded built and sold ambassador a referral marketing program platform jeff you're ready to take it to the top yes absolutely all right listen we haven't chatted i don't think since the ambassador days but my gosh i'll tell you what there's so many satisfiers i interview and they say our number one channel it's affiliates but it's always difficult to manage the affiliate model so you played in that space and ambassador close that story out for us what happened yeah so uh it was a great ride um in in 2017 late 2017 we decided we were going to think about like selling uh the business and so ran through a process and you know we could talk for hours and hours about how that went but ultimately it was it was a pretty successful outcome um it was you know bittersweet of course uh but the great news was everyone uh you know did fairly well obviously all the shareholders were um you know they they received sort of a really nice sort of uh sort of surprise from for many folks uh from from stock obviously um and many of the many of the team ended up moving up and joining the acquire which was west corporation in you know various capacities but ultimately uh could move throughout the organization and of course move up inside of ambassador as well so it was it was a win-win um but you know it was bittersweet and it was for me it was time to focus on something else after about a decade what made it bittersweep i mean i i'm going off memory here but i think like when you came on i i mean you were like yeah like i don't know like three or four million in 2017 i want to say and then you more than doubled i think in 2018 like eight or nine million and you were pretty you were pretty capital efficient i think it only raised like five million or six million bucks is that all right yeah so we we actually only we raised under three million and wow we were capital efficient i think you know looking back i think it was a little bit of burnout to be honest uh for me and just the team i mean we pushed really hard and you know i think we outworked a lot of competitors uh you know we sort of a motto to do more with less and i think it catches up with you and i think it as a team i think we were really close-knit and super proud of everyone and they did a great job but i know personally for me i was uh i i think i was kind of burnt out myself just pushing so hard for so long and um so it was i think it made sense at the time instead of sort of raising more money and like even doubling down again was to sort of you know move on and we thought we found a good home uh and we thought was a really great partner and um so that was sort of the way we we went was my revenue number right there was about an eight or nine million in 2018. i think when we sold we were around eight eight okay okay and last minute on this right so you remind me a lot of andrew gazdecki uh who hits the same story with why he sold business apps which was just crushing it i mean you really capital efficient 15 million ar he basically sold he shared with me about for about 1x right but he said nathan i don't optimize evaluation i just want to move on and now he's building my growth fire can you help me understand sort of i mean you sold i think to i mean you sold a private equity firm right it was it was a it was a company that was run by a private equity firm so west corporation run by in toronto um i'm sorry and tr west corporation and the private equity company was apollo group so like super huge backing but it was from my understanding and they they don't share a ton with me right like we were a small piece of a big pie um but they were pretty autonomous in terms of choosing choosing the deal and i think apollo just sort of signed off on the high level logistics would be an understanding okay great and i mean can you share like multiple in terms of revenue in terms of what you sold for 1x 3x more i i mean i can't we we can't share like specifics but it was it was definitely multiple revenue you know instead of like an ebitda multiple so it was you know it was it was it was a solid range it wasn't like 10x and it wasn't you know some ebitda multiples definitely a revenue multiple yeah well look i mean congratulations right i mean from everything you're telling me what i'm really asking is like does the capital waterfall on the exit hit the early employees you gave point two percent equity to and it sounds like that was a definite yes it did absolutely yeah yeah so you created this is good for a lot of people so okay let's move forward now to onboard when did you launch the business so we launched onboard in 2020 actually and um it was based on and sorry this is when we started we didn't actually launch until until just about a month or two ago but the concept for onboard was from our problems and challenges that ambassador of launching big enterprise companies on our technology and a lot of people had to do a lot of things and sort of managing that process what were you doing between because you exited ambassador and you think you said in 2018 right 2017 2018 yep what'd you do for two years so for for one year basically all of 2019 my plan was to just sort of get healthy sort of sort of like decompress and i know that's like a super fortunate position to be in but uh that was essentially what i planned on doing i did a little bit of consulting i took you know still talk to folks that were in the business and this help and mentorship and and invest in some angel investing but for the most part i i focus on myself um and then in 2020 as we sort of got into covid we started kicking around ideas with some of the some of the old you know sort of getting the band back together again and so for most of early 2020 until we eventually um ended up sort of starting actually working on on onboard in about april uh we were sort of thinking about ideas and what are some of the things that we really had pain points with at ambassador and like how could we address those in a way that no one's doing today just touch on this quick because mental health and just health in general is a big thing and a lot of us will ignore this i mean did get ambassador that household it sounds like it actually made you some to some degree sick you said get healthy for two years i i mean i think i mean the the work itself didn't make me sick i mean to me it was definitely i made myself look i i have i i think i have a i have a pretty strong willpower and willing to push through a lot of sort of like pain i think like it's not me right it's like all entrepreneurs like they're willing to push themselves to lengths that the maybe most people wouldn't and that's not necessarily a good thing but i think it's probably fairly accurate and so i mean for me like i over the course of 10 years i mean i gained probably 40 pounds you know i you know i i wasn't eating healthy right like i was traveling a lot i wasn't sleep i probably was sleeping like three or four hours a night a while period of many years in a row and i can do it like i sustained fairly well um but it's i think you know i'm getting older it takes a toll and so for me i think all those things just added up it wasn't like i mean i you know i think like i was stressed out and things like that so i think just focusing on you know being a little bit more mindful of my health and well-being it was certainly sort of on trend and i think that was good that it became a little bit more mainstream and okay to think about and talk about uh but for me it was it was something that i i was like you know i'm fortunate enough i can invest in these things instead of having to invest in a business like i can invest in in myself so that i can be you know better for longer essentially yep you're pioneering this new concept on board uh called maps which we're gonna talk about here in a second uh but first you said get the old band back together now a lot of second time entrepreneurs will say the most bluetooth event was my co-founder my next thing i'm gonna have enough money i'm just gonna pay someone a lot of money and i'm gonna keep a hundred percent what did you do so it's funny i actually thought about it in the opposite way uh for me it was actually quite lonely so i was from for all intents and purposes the first few years of ambassador was all me and i at at points i owned almost 100 percent you know over time more there were investors and then the team received you know a bigger chunk of of the equity which which i think was great and for me the second time around what i much more cared about was working with people that i like to spend time with and sharing some of the sort of burden of carrying it all on your back and so you know that was the big difference for me was when you're the solo founder essentially there's just so much more that you're just carrying the weight of and and it has to be that way right like you can't uh you can't have it any other way even if you hire someone to do the work uh it's the equity splits and things like that it's ultimately going to fall to you and so i i yeah i know i have a true co-founder with will it's it's a lot more fun um you know we both you know started on day one and um you know we both have you know a big a big chunk in the outcome and and you know a big say in like how we decide things and is zach involved too or is it mainly you and matt so so so it's it's myself will and matt um and zach is sort of like a founding was a founder who's now an advisor um and he's obviously a really good friend and still helping us with the business but he's not doing day-to-day uh right now yes okay so that's sort of how you get things going true true co-founder this time around we'll see how it works out tell me about the first customer how did you land them yeah so the good news is we did have a little bit of a network so the first customers came through investors as we were pitching uh sort of telling them our product was being launched our investors started sort of asking their portfolio companies so the nice thing was we did have companies really as soon as we tuned the product on we had you know a handful of companies using it we're still super early so we're still definitely iterating on on the feedback of those early customers and then you know the next few dozen that are that are using us and paying us now uh but it's it's fun it's it's it's moving way back to the beginning of the of the spectrum where it's you know really learning and understanding and really diving into the use cases and the little intricacies of the product so you said a couple dozen what 36 48 customers paying today yeah even even we have uh yeah a couple dozen so even a little bit less than that okay guys we'll call it 30 or so and um the first comes from the network which is great i always love when folks use the raised process to land investors or investor portfolio companies as customers it's obviously a smart way to do it how much did you end up raising we only raised 1.25 million so in this day and age not a ton but uh the beauty was it was old investors who literally gave us money pre-product pre-team so it was you know myself and will sort of you know and zach at the time were talking about you know what do we want to do and one of our investors was like hey you're not going to do this without taking our money so and i love working with them it was you know ludlow ventures was done really well and so they were like you got to do this well and you just earned them a pr maybe not a blockbuster return but a pretty darn healthy return at an ambassador yeah definitely yeah yeah yeah yeah i mean yeah yeah i mean you you wouldn't take i mean you have a million yourself i mean you could have funded it but really having the partner is why you did it and they also brought in customers it sounds like exactly yeah okay yep run away what do you so you also you know eight nine ten years ago were getting your first 30 customer that ambassador you approach those 30 probably different than you're approaching the first 30 at onboard what's the biggest difference are you listening to all the ideas they give you or are you being more deliberate so the really the biggest thing for me there's really two two specifics one is it was a problem that we actually faced this time so with with ambassador it was much more of a concept and idea that i had that i thought would make sense but it wasn't something that i actually lived in i was never an affiliate marketer at a business i had like an affiliate little side company that i had so i had some ideas but i didn't really feel the pain with onboard we felt this pain very clearly uh me as running a team and trying to mitigate churn and understand how do we grow our you know top line but also how do we grow our bottom line like our you know how do we keep customers longer and will us was you know he he was also in charge of making customers happy right and keeping them retaining them and onboarding them as quickly as possible and keeping our onboarding team efficient so we you know we didn't have to hire new employees every time we closed a new deal so this was a pain that we felt really closely right being a super um scrappy and capital uh capital efficient team uh so that's that's first and foremost and then second was you know we are focused on sort of trying to hit a niche as you know b2b and maybe software and maybe even even more narrowly sass versus trying to solve all things for all people right and the first time founder i'm like i just wanted to say yes to everything and then just start building that and then you end up do going in 50 different directions and you're like does it actually work for anyone specific and so this time we're more intentional it's it's hard though i mean i understand why i did it now because it's so hard to see someone walk away even though they're like oh this is perfect if you did this one thing but the one thing isn't in the road map yep yep now 30 customers your pricing page is more mature than most startups we'll talk about that in a second but i imagine most of these folks are what 200 300 bucks a month something like that yeah so have you passed have you passed 10 grand a month in mri yet no not yet we're hoping too soon though you've got to be closed yeah yeah very cool that's a special moment even though you've done it before it's still a special moment i want to talk about your pricing page right because because you've done something here which i think is compelling you've given yourself the opportunity to upsell against multiple pricing axes right you have the user-based upsell and then you have a per seat price under that you also can say let's test up selling based off product upselling they only get outboard if they're on sort of more advanced plans and you also do things like you know the custom branding right or the designated customer success manager on the top tiers why were these sort of your initial um shots at like how to set up the pricing page yeah so we were thinking about pricing from a couple different perspectives and the beauty of getting funding earlier in the process versus last time where it was coming out of my pocket was we want to optimize for information and feedback instead of optimizing for revenue so it's an intentional decision on our on our side to price much lower than we where we expect to be in the next year and in fact we've actually already raised our prices once yeah same thing in ambassador we raised our prices every quarter for almost five years and we didn't lose customers we ended up moving up market of course but um we found that if we can deliver on a product and deliver even more value the prices um is not the main you know determinant for for the sale in this case though we want the low price to be a determinant so people try us and give us feedback and we can get more people in the door and learn so that's the that's the intent there but we do know as well that there are some people that are willing to pay a lot more for other things that we can provide like you know more more you know more more of an onboarding or a consultative type um experience so we wanted to leave those options open for some of the bigger companies that they don't care at all about the price but they do care about basically maybe having their hand held a little bit more or for having you know more customization and things like that yeah i mean is the customization and the sort of higher touch you can put on these folks i mean is that going to be the mouse trap that allows you to really differentiate from like you know the pendos of the world it it can be you know i mean i think you know the biggest differentiat differentiation we see from a company like pendo and it's in we're sort of walking into a a muddy muddy waters here where pendo does a lot of user guiding and we we consider what they do actually user onboarding so helping an individual user of a product or service get clicked through the appropriate points we we see ourselves as what we call company onboarding which is really getting the technology implemented so that that user can in fact actually walk through efficiently so it's really all the things that need to be done before the user even gets access and so we see them as more complementary than competitive even though the word onboarding is used in both cases which is a little bit confusing is this sort of a throwback to you know ambassador couldn't work unless i installed javascript but the marketer you're selling to can't do that without the tech team so you're basically now helping people that have to do more and more more in-depth things to onboard besides click a button here there you're helping them do that exactly that's exactly right without without the javascript the marketer can't be successful and in order for the javascript to work we need to sign off from legal compliance design and all these folks and then the marketer can get the walk through from pendo but before that all these other things need to happen and that's where you want to play yes i see okay we heard about your co-founder splash out the rest of the team how many folks full time we have five five okay and does that include you three yes yes okay so how many of you guys are actually pushing code three pushing code myself and will non-technical uh but technical enough to be dangerous and sort of speak to onboarding so we're doing everything else you know sales success uh a little bit of product as well and then we have the three uh x ambassador uh devs who are awesome and just jamming away well jeff you're in hot space man it's fun to see you execute here let's wrap up with the famous five number one favorite business book oh i'm gonna go with the hard thing about hard things number two is there a ceo you're following or studying [Music] um man uh i mean it's super cliche but elon musk uh is obviously one that i'm always interested in following number three what's your favorite online tool for building onboard.oh besides your tool i'm big fans of hubspot they've really come a long way number four how many hours of sleep are you getting every night so my my goal is about eight so i'm probably probably at about seven which is a lot more than before and what's your situation jeff married single kiddos married two dogs no kids no kids and how old are you i'm turning 40 in a couple weeks a big four oh take us back 20 years what's something wishing you when you were 20 man uh that everything was going to work out i think okay guys he learned a bunch of ambassador grouch about a 9 million run rate very capital efficient sold it back in 2018 took two years off to get healthy now coming back at it building a tool for himself plus his first 30 customers on board dot io inventing maps really helping people do the more in-depth things to get your tool working for them like javascript uh embeds and things of that nature so that then others can come on and actually help uh get more users onboarded with clicks and things of that nature we'll see what happens they're about to pass ten thousand bucks a month in revenue again capital efficient 1.4 million raised as jeff looks to scale jeff thanks for taking us to the top thanks nathan appreciate it 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 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