How Overcast HQ Reached $100K/Month in Revenue with 200 Customers (Interview with CEO Philippe Brodeur)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Philippe Brodeur. He fell in love with video by making it as easy to manage as Word documents through his current company, Overcast HQ. That's overcasthq.com. Before that, he spent over twenty years with iconic creators like the BBC and Disney, now does it for businesses that innovate around marketing and product development. Philippe, you ready to take us to the top?

Philippe Brodeur

00:22>> I certainly am, Nathan.

Software vs Agency Clarification

Nathan Latka

00:23Alright. So just to be clear, you're not an agency. Right? This is a software piece of technology you built.

Philippe Brodeur

00:28>> This is a piece of technology. We are not an agency. It's a good question though because people often think that we are an agency. But no, it's it's technology. It's SaaS. You can either buy it online or get a managed version through us.

Who Buys Overcast HQ and How They Use It

Nathan Latka

00:40Who's buying it and what are they paying for? How are they using it?

Philippe Brodeur

00:43>> Well, it's a you know, COVID changed everything. Right? So we built a media asset management or video asset management or video content management platform. What does that mean? It's It was built for businesses and it's much like what librarian would use, you know? So only a few people would use it because it was a big heavy platform and, know, fairly complicated to use, kind of like a digital asset management platform, which is generally used by few

COVID Virality and 13x Interaction Growth

Philippe Brodeur

01:12>> people. So what happened was during COVID, we've got this little viral thing that goes on in it where you can invite a collaborator to come in and start accessing content. Well, during COVID, what happened was, people started to to share it around, and and our interactions on the site, grew, 13 x in 2020, like 13 x. So and and the number of users grew almost five times. So what happened was all of a sudden people started

01:41>> to understand, well, hey, I can actually manage video in the cloud. It's very difficult to manage large files on premise. But managing them in the cloud, well, that's a different thing. Right? We made

Nathan Latka

01:51Well, you just be clear, you're not an on prem solution, right? It's all in the cloud? No,

Philippe Brodeur

01:55>> 100% cloud, cloud native. It's all, yeah, it's serverless and it's a modular microservices architecture. So, you know, I don't want to talk too much about technology, but basically we're making it possible for people to manage video the way that you manage Word documents. If you think back, well, you're probably a little bit younger than I am, but my I remember back in the nineties, my father, he had a secretarial pool in his office. That's not that

02:24>> long ago. Right? A secretarial pool.

Nathan Latka

02:26Yeah. I feel I have no I have no idea what the hell that is, but it sounds like something I don't want. Think my audience, though, knows this space. Well, I mean, we had the Frame crew on recently. Like, lot of them used frame.io. It sounds like you were sort of playing in the same space. Right?

White-Label Positioning vs Frame.io

Philippe Brodeur

02:40>> Yeah. So we are very much playing in the same in in in the same space. I think there's a there's there's couple major differences. Like, so for one, we get compared to frame.io a lot. Right? Yep. Frame.io are a multi tenanted SaaS. What does that mean? That's frame.io. When you buy frame.io, you buy frame.io, right? And it's part of your SaaS stack. When you buy Overcast, we're a white label version. Okay, so what we're doing is

03:03>> we're integrating with your tech stack already and we're moving into the background. Okay, so we're not the ones, we're not saying that, you know, this is our brand upfront, we're actually helping to manage all the all the big content.

Nathan Latka

03:17Why is that important for you? By eliminating your brand, you reduce your ability to drive word-of-mouth and freemium and sort of new, you know, CAC arbitrage sign ups. Why'd you make that decision?

Philippe Brodeur

03:26>> Well, Intel Inside. Right? Like, you don't have to one ever went out to buy Intel. Right? But Intel Inside really works. And and I think it works for video as well.

Pricing Structure and Customer Range

Nathan Latka

03:35Mhmm. Help me understand these folks that are using you. What are they paying on average per month to use the technology?

Philippe Brodeur

03:42>> Yeah, so they pay

03:45>> a per user price and then they pay a usage price as well. So it's never really that easy to understand. I suppose on the low end, we do sell at about $500 a month.

Nathan Latka

03:58Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:21your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

04:46a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not

05:08built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

05:33out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if you

05:55wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview.

Philippe Brodeur

06:22>> But that's really a self start as a SaaS product. It's very easy to get up and running. And that would be for a small team of maybe 10 people. Right? But then we're selling right up to, you know, 20,000, 30,000 a month as well. And that's, we're going into enterprise and what are we doing there? So imagine you're a Unilever.

Biggest Customer and Team Size

Nathan Latka

06:41Well, Philippe, just to be clear, is that the spectrum lowest is sort of 500 a month and your biggest customer is paying 30 ks a month?

Philippe Brodeur

06:47>> Yep.

Nathan Latka

06:48Okay. Got it. And how many just paint the picture of the big picture. Like, someone paying you $30,000 a month. How many people are on the team and how are you measuring usage?

Philippe Brodeur

06:57>> So how many people on the team? We got 20 people on the team at the moment. And in terms of measuring usage, you know, in terms of like the amount of content.

Nathan Latka

07:08Yeah, that's exactly what I'm asking is how do you quantify it? Is it number of videos, number of storage space, number of minutes processed? What's the metric?

Philippe Brodeur

07:15>> So all of the above, in fact. So we at interactions. So we've got comments, annotations, we've got video processing, we've got sharing, we've got downloading, we've got reformatting. Isn't that

Nathan Latka

07:31complex, Philippe, to track? Like, don't you have a key metric that is the most important one and that is what usage and pricing is tied to?

Philippe Brodeur

07:39>> So it's it it is a calculator. You're right. It is complicated. And, you know, we do we do a customer deployed solution with AWS. So what that means is that we can with the with larger companies, and this is really key, actually, with larger companies, they can do probably already have an account with AWS, right? They probably already have their content stored there. So we can deploy on top of their storage to bring your own storage

08:05>> module model. So when you say, what is the key metric? Yeah, in that case, it's a license fee, right? It's the number of people that are using it. Right? And in fact, all the hosting and all the storage is paid directly by the client to AWS. We also work in Azure and

Nathan Latka

08:25I see. Okay. Cool. So that's the rank. That's the range and that's really helpful to understand your pricing. I am gonna try and force you here though into a sweet spot. So right, what what's the sweet I mean, is 10 k sort of a month your sort of sweet spot right now or is it a lower or higher?

Philippe Brodeur

08:37>> Yeah. So we we we we try to start at 5 k a month. We we we don't chase anything under that because really, it's it's hard to make a profit on that. But, yeah, 10 k would be would be definitely a sweet spot.

Nathan Latka

08:50Did I mishear you earlier? Sorry. Thought you said 500 a month would be 10 people. Did you mean to say 5 k or did I mishear you? It's 5 k a month for 10 people? No.

Philippe Brodeur

08:57>> It's it's it's 500 for 10 people. So we have a SaaS product. Right? Which is which is which is built it's simply for for small for small teams.

Nathan Latka

09:07I understand that, Phil, but you just said you don't start under $5k a month, but you're saying there's a $500 a month.

Philippe Brodeur

09:13>> No, sorry, we chase So, okay. So, do two types of sales, right? We do hunting. All right. So, hunt and we hunt enterprise. Right? And that's it. That starts at 5 ks, sweet spot 10 ks.

Nathan Latka

09:25Absolutely I see. Sorry. I should have asked my question differently. I'm not asking necessarily about outbound. I'm looking at if you look at your current customer base today, whether you hunted them or they signed up freemium and upgraded themselves, the current sweet spot in terms of size of account is something like 5 to 10 ks a month. Is that accurate?

Launch Timeline and Founder Background

Philippe Brodeur

09:40>> Correct.

Nathan Latka

09:40Okay. Okay. Okay. Let's go build the backstory out here. When did you launch the tool?

Philippe Brodeur

09:45>> So, okay. So that's one thing I don't like saying either. I like calling it a platform because it's really, it's a big heavy piece of software that's in the cloud. So we actually launched in 2018 and that was probably two years after we started coding.

Nathan Latka

10:05Okay. So how did you fund yourself between 2016 and 2018?

Philippe Brodeur

10:10>> We got grants and I had a good exit before that. So I was able to fund myself and our

10:18>> original development team.

Nathan Latka

10:19That's obviously a great position to be in. I love obviously a bootstrap Founder. What was your first company?

Philippe Brodeur

10:25>> First company was well, I had I had a couple of them. One of them was Hot Air Productions. Another one was ALTV, another one was AirTV. I've had a number of video production companies.

Nathan Latka

10:38Is this your first sort of SaaS play?

Philippe Brodeur

10:40>> It is. It's definitely the first software SaaS play. So what had happened was I was actually working for a number of other, you know, large broadcasters and telecom operators, building their platforms for them. It was like an entrepreneur, right? And then what I said, well, why don't I do this for myself? I mean, it just took me, you know, a couple of decades to get there.

Nathan Latka

11:05Interesting. Okay. So how if you had to estimate how much you had to spend yourself in those two years building the MVP, what would you say your total exposure was?

Philippe Brodeur

11:13>> About 1,000,000.

Nathan Latka

11:14Okay. And looking back, were you pretty efficient there or could you have done it for a 250,000?

Philippe Brodeur

11:21>> I think no. I think we're pretty efficient. I think the biggest challenge was that we were early and timing is everything. So I think that, you know, you look at COVID, that's been a great incentive for people to start working in the cloud. I mean, you look at what happened to frame.io, I mean, absolutely brilliant stuff with what they've done. Getting it

Nathan Latka

11:43Did Adobe over or underpay in your opinion?

Philippe Brodeur

11:47>> I think they paid a really good amount. I love them. I love them to have a look at my my my platform as well.

Nathan Latka

11:53What do you believe that what do you obviously, it was public that it was a $1.28 billion dollar deal, but what's your best estimate on what that multiple was?

Philippe Brodeur

12:02>> Oh, a lot. I I Do you know

Nathan Latka

12:05what frames revenue was or a range?

Philippe Brodeur

12:07>> I I I do not. I think it was around I think it was around

Nathan Latka

12:12$30, $40 million. Is that right? I don't have any insider information, but we've also put it around that amount.

Philippe Brodeur

12:20>> Yeah. That's where I think it was. But you know what? They were growing fast and I think, you know, Adobe, what they did was they said, look, collaboration in video is the future. And they and they sent down a marker and they said, this is gonna be a really valuable thing going forward. Right? And and that's what we're saying as well, is that there are very few stakeholders in the business community at the moment who actually

12:41>> take part in the video it's in the video supply chain, right? It's still engineers and editors predominantly, absolutely predominantly. The cloud's gonna change all that. It is changing all that. And that's and that's where we position ourselves. And that's exactly where Frame position themselves as well. Although Frame much more prosumer, we're much more enterprise.

Nathan Latka

13:00Yeah, I would agree with that. Yeah, you guys are lower volume, higher ARPU, they're higher a lower ARPU, higher volume.

Philippe Brodeur

13:06>> Absolutely.

Revenue, Customer Count and Growth Rate

Nathan Latka

13:08You code from 2016 to 2018, first customer in 2018. How many customers are you now serving today?

Philippe Brodeur

13:14>> So we've got about 200 clients at the moment, and we're doing, I don't know,

13:23>> about, I don't know, five, I think 5,000 users, something like that.

Nathan Latka

13:29Five okay. And those 200 are all paying customers?

Philippe Brodeur

13:32>> Yes.

Nathan Latka

13:33At the 5 to $10,000 average price?

Philippe Brodeur

13:37>> so like I said before, we started off at at a very at a very low level and we were getting people on at a at a very, very low price point. And now they're And now we're It's been part All that progression happened during COVID when we went into the enterprise market.

Nathan Latka

13:53So is it fair to say that your average customer is paying something more like 500 or $1,000 a month versus like 5 or $10,000 a month?

Philippe Brodeur

14:00>> Oh, absolutely. Absolutely. Yeah.

Nathan Latka

14:02Yeah. Yeah. Okay. And that's because you started you've increased your pricing. You have a bunch of early customers that pay much less.

Philippe Brodeur

14:07>> Yeah. Yeah. So we went out we went out to find to to get basically people to pay for it and use it to value it, learn from them, understand what works, and then go into enterprise.

Nathan Latka

14:18A super smart strategy. Now that makes tons of sense. I just wanna make sure I capture your story accurately here. So 200 customers at an average point of $500 a month would mean you're doing about a $100,000 a month right now in revenue. Is that about accurate?

Philippe Brodeur

14:29>> That's about accurate. Yep.

Nathan Latka

14:30That's great. And if so, what were you at about a year ago so we can calculate growth rate?

Philippe Brodeur

14:35>> So we were so growth rate I don't have the actual number on that, but growth rate is about four four x. It's just under four x.

Nathan Latka

14:48Four x. Okay. Got it. So you're doing about $25,000 a month a year ago? Yeah. If you've four x ed. Where most of growth come from? Was it expanding those accounts up to much larger plans or was it bringing on brand new customers altogether?

Philippe Brodeur

15:00>> So the growth came from, well, internally in a number of the clients, right? Like I said,

15:08>> actual usage of the platform grew very, very fast in 2020. And the revenues followed after that. And the revenues really followed with larger clients coming on board and just paying more money, frankly.

Funding: Pre-Seed Round and Grant

Nathan Latka

15:25And I believe you've raised capital twice, 2017 seed round and then a grant in 2019. If those are accurate, tell me how the grant works. Do you have to pay that $1,500,000 euros back to the Disruptive Technology Innovation Fund or is that basically a donation?

Philippe Brodeur

15:37>> No. It's a donation.

Nathan Latka

15:38That's amazing. How do you get a donation? How do you get €1,500,000 of free money?

Philippe Brodeur

15:43>> So it's a look, it's a big project. We're working with Trinity College Dublin on it, and we're working with another company called Kinesense. And one of the things that we're developing there, really exciting, is a video management platform for policing. So they probably make more content than any other vertical out there through CCTV, body worn camera, dash cams, etcetera, etcetera. And most of most all of that content is managed on premise. I'll tell you one little

16:14>> story. There's a police force in The UK that in 2019 made 32,000 taxi rides moving content on memory stick from one place to another.

Nathan Latka

16:26That's a lot that's a lot of work. You're helping them solve that, which we love. The 600,000 you raised, which was a traditional, I believe, pre seed round in 2017. Why'd you raise that capital?

Philippe Brodeur

16:37>> So we so here in Ireland, we've we've got a couple of great opportunities. One is through Enterprise Ireland where they where they match funding. So we we were able to raise money from angels and then and then have the Enterprise Ireland guys come in to match that, which was great.

Nathan Latka

16:54Was it pretty standard, 5,000,000 cap convertible note, that sort of thing?

Philippe Brodeur

16:59>> It was a it was a convertible note. There was no cap on it, believe it or not. And there was and the and yeah. So it was that was and and then to the angel, it it was equity.

Nathan Latka

17:14How patient can you be? You know, you put a million bucks into this business back three, four, five years ago. You're just now breaking through that million dollar run rate. Do you ever get nervous? Oh my gosh, I'm never gonna see that money again. Is this gonna work out? Like, is your whole life sort of on the line here or is this like a small check for you?

Philippe Brodeur

17:29>> No, it's absolutely a big risk. I said earlier, I mentioned earlier about the timing, right? You live and die by timing. And when you have a vision that

Capital Efficiency and Founder Risk

Philippe Brodeur

17:42>> the world can be better using technology. And like I said, radically simplifying the way we work with video in business. I believe that, everybody I spoke to believed it. I just don't believe that the marketplace was ready for it. So,

18:01>> yes, it's been very nerve wracking getting to this point. It's lovely being in the inflection point. I'm not too sure it's any easier at this point in time because we're struggling with all those things like, you know, cash flow and and, you know, we've gotta hire people to support new clients.

Team Breakdown: Engineers and Sales Reps

Nathan Latka

18:15How many people are full time today?

Philippe Brodeur

18:17>> So we have 20 people.

Nathan Latka

18:1920 people. And how many of those are engineers?

Philippe Brodeur

18:21>> We got eight engineers.

Nathan Latka

18:23Wow. Any full time sales reps? And if so, how many care at quota?

Philippe Brodeur

18:27>> Yeah. We got we've got two we've got two full time sales reps. That's it.

Nathan Latka

18:32Both with quota?

Philippe Brodeur

18:34>> No. No quota.

Nathan Latka

18:36No. Why no quota target?

Philippe Brodeur

18:38>> Because because we're still out there hunting. Right? And and we still don't have an absolute 100% understanding of what our vertical is.

Nathan Latka

18:50So, you ever have a 100% understanding?

Philippe Brodeur

18:53>> So, I think we're getting close. So, you know, we look in, we hunt in, we were hunting 100% in media entertainment for a number of years, because I come from a media entertainment background. I come from a broadcaster, right?

19:12>> And then we started looking into other verticals and that's And, you know, going back to your intro there, you know, we're working with drinks companies, manufacturers. We worked with a cement company for a while. And now we're starting to work with the police. I mean, the police Understood. Huge, huge opportunities.

19:30>> Well, we'll see what happens.

Nathan Latka

19:31We're out of time though, Philippe. Though for now, let's wrap up with a famous five. Number one, favorite business book?

Philippe Brodeur

19:37>> Favorite business book? Four Hour Workweek.

Nathan Latka

19:41Number two, is there a CEO you're following or studying?

Philippe Brodeur

19:45>> See there's a guy, Stuart Lombard, who who started Ecobee, and and I think he's a pretty cool guy.

Nathan Latka

19:52Number three, what's your favorite online tool for building Overcast?

Philippe Brodeur

19:57>> My favourite — LivePlan.

Nathan Latka

19:59Number four, how many hours of sleep do you get every night?

Philippe Brodeur

20:03>> Not enough. Let's see. I was up at my desk at 05:00 this morning. I'll be working until 08:00 tonight. That's a pretty standard day.

20:13>> Alright. Six, seven hours.

Nathan Latka

20:14Okay. And what's your situation? Married, single, kids?

Philippe Brodeur

20:17>> Married, three kids.

Nathan Latka

20:19Wow. And how old are you?

Philippe Brodeur

20:21>> How old am I? Yeah. I'm 56.

20:24>> 56.

Nathan Latka

20:25Last question. Take us back to your 20 year old self. What's something that you wish you knew?

Advice to 20-Year-Old Self

Philippe Brodeur

20:30>> I wish I knew how to take the risk to be to go out on my own.

Closing Summary

Nathan Latka

20:38Guys, there you have it. Coming from a guy that worked and helped build a lot of other people's companies, launched his own finally in 2016, put a million bucks of his own capital into it, just passed 200 customers, about a $100,000 a month in revenue, scaling nicely, very capital efficient, just $600,000 raised in a pre seed round back in 2017, and then worked to get a €1,500,000 grant in 2019, which is looking to scale.

20:5920 folks on the team today, again, helping folks basically build their own internal versions of frame.io manage their video content, especially for folks like police forces. Philippe, thanks for taking us to the top.

Philippe Brodeur

21:09>> Nathan, great talking to you. Have a good day.

Nathan Latka

21:13One 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 one

21:38p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two 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 SaaS world, whether it's

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22:21saying. Sign 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

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