How Ordermark CEO Paul Allen grew Ordermark to $6M revenue and 1K customers in 2020.

hello everyone my guest today is alex cantry runs coming called ordermark which simplifies online ordering to help restaurants increase profits and lower expenses through its technology platform and professional services the company enables restaurants to easily add and manage multiple third-party online ordering services to maximize their online ordering potential alex are you ready to take us to the top yeah thanks for having me on the show today you bet so i think when most people think about this kind of thing they think about maybe like uber eats or things like that tell us how you fit into the kind of overall ordering ecosystem sure so rather than competing with any of the online ordering services we actually uncovered something while i was working at my family's restaurant in los angeles called cancers deli we realized that each different online ordering service like ubereats postmates doordash grubhub all had their own customers and so i wanted to create a simple way to connect into all of these different online ordering services through a single device got it okay fundamentally why we built order and did you use this first uh is this a family shop deli you guys run um sort of it's it's a family business it's been in los angeles since 1931. sort of my great grandfather opened it right after the depression and it's been in my family for four generations that's amazing okay so you built this really to solve your own problem what year was that when you launched um well i started uh my first experience with online ordering was really 2008-2009 and over the course of a couple years i kept adding new systems additional hardware into our family business which basically ended up with nine tablets two laptops fax machine for all of these incoming orders it was a total train wreck and i wanted to create a simple simple solution for the staff because they want to kill me so i actually started the company in january of last year 2017. um to basically um build this all-inclusive device that's great so so what is this now is it i mean is it a sas platform or a hardware play how do you make money um so it is a sas uh service we actually provide restaurants with equipment a single dashboard and a single printer um that we ship to them in the mail and they plug it in and it's basically plugging them into every online ordering service that's available and relevant okay got it and help me understand you know your parents or you know the average deli what are they gonna pay per year per month for your tool um well uh typically for mom and pop restaurants we have a pricing that's around 79 a month plus a small fee per order and then we have uh flexible pricing options for chains and larger organizations okay would you would you say that 80 bucks a month is a fair average across your current customer base or is it much higher um as a as a starting point yes okay but sorry not as a starting point but as an average across your current customer base is it still about 80 or higher it's a little higher than that but um yeah it's um close to around 100 to 150 okay great and then help me understand the model so it sounds like you also take a percentage of kind of the transit transaction volume through the service yeah yep okay and if you look at your kind of revenue over the past 12 months how i'm curious how big or small that section of the revenue is um well essentially over time uh it's still a fairly new company we had um our first restaurant signing up towards the end of last year and then this year we really exploded we're now in a thousand restaurants nationwide paying or free and paid all pay that's great yeah how did you do that by the way sorry just to follow that line that part of the story how did you explode that quickly did you do something special or um i think we the problem that we're solving really became relevant recently um you know there weren't a ton of online ordering services five years ago and now a lot of restaurants are faced with this challenge of adopting online ordering into their business and a lot of restaurants aren't prepared for it um ultimately we're giving them a simple way to get the order information directly to the kitchen in a language that they're already used to and understand it's your thermal ticket that needs to go on the bag to go out the door yeah and so and so again if you look at your past 12 months revenue that's called 100 of your revenue what percent came from transaction volume fees versus just the sas model um it's all actually part of the sas model so even though it's broken down in different ways it's pretty much all um coming from the 79 a month was 25 cents an order it's it's it's basically across the board for different restaurants it means something to mom and pops and then for larger organizations that typically and for all of our enterprise clients it's 100 is the sas oh i see i see okay great okay so launched it officially in 2017 up to a thousand customers paying caught a hundred bucks per month on average each i mean that would put you at about a hundred grand per month in revenue is that directionally correct essentially yeah that's great and what's growth look like so a year ago november 2017 where were you at per month um i think in november of last year we were at about 15 restaurants it's about 1500 a month huh maybe even a little less than that at that point but yeah we certainly had an explosive year we really started to understand what it meant to turn a brick and mortar restaurant into an e-commerce friendly restaurant and now that we've gone through the motion so many times we've gotten really good at it attention through conferences media press coverage and i think fundamentally restaurants are searching for solutions so this was growing problem and we are you know one of the the best ones available in the market and alex have you done this bootstrapped or have you raised capital uh we've raised capital oh man i liked you so much and now you're like dark side you've raised capital um you know to be honest at first i was a little skeptical about the bc world and what it would mean to our business and we want someone to come in and tell us how anything needed to be done and over time i realized that um it's important to find vcs that are aligned with what you're what you're looking to accomplish and i cannot be happier with the group of investors that we've ended up with how much have you raised to date we raised uh 12.6 million since we started we just did a series a back in september a couple months ago um that one was 9.5 million yeah so that was really the majority of the capital coming in and it makes sense considering the growth you guys have had um i'm gonna push you harder though on how you went so quickly to a thousand restaurants because um i wanna make sure we're not glossing over any details i mean even with press i mean a lot of people get press coverage a lot of people get mentioned a lot of people have a great product you figured i would actually sign these people up i mean is there anything else unique you're doing to get these sign ups um you know i think we we have a great team that understands exactly what the problem is because we built this first of all my own family family's restaurant um we haven't pivoted since we started the company we knew exactly what we set out to build and we've basically been executing on that since day one and so i think there's a lot of trust that this is something that was built in a high volume restaurant if it's something that a lot of restaurant owners can identify with so you know having the background that i have giving me unique perspective on the industry itself i also think that um our our our team is very effective with digital marketing we've been um very effective um getting our product in front of customer apps yeah what um what's the team look like today how many people um right about 60 people today 6-0 yes 6-0 we have um two offices our headquarters is in los angeles and we have a an additional sale office in denver as well la and denver that's great and then break down the team for me so of the 60 how many are focused on sales and marketing and onboarding um there's only a couple on sales um we have less than about a handful now and most of our resources are technical a lot of software engineers a lot of customer support account management onboarding we have um i don't know we have a really fun team that's very young we have uh what's the average age do you know like to calculate that but i would have to guess it's probably around uh somewhere between 28 and 30. that's funny how old are you i'm 26. i love that that's great all right and um well you know churn is critical in a sas company especially restaurants which tend to go out of business a lot what's your churn today and how do you keep it low um our journey is actually something that's very that i'm mind blown about our churn is lower than the national restaurant average currently less than two percent and i think that's because restaurants were using our platform um are embracing online ordering and realizing that it's something that's a fundamental part of being a successful restaurant so i'm very happy um with the retention on the platform it seems like um every day we're getting love love notes from our restaurant owners some of the people who were faced with the challenge of juggling all these tablets behind the counter um so overall i think um i think just to be clear sorry that two percent number that's logo churn per month um that is that is our total charm percentage...