Party.Spacerevenue & funding

Introduction hello everyone my guest today is yearly philip he is the founder and ceo of a company called party space he's an ex finance pro four years in bc in private equity with tech focus investment firm cyfrd and he's keen on hustle culture and b to be sas here are you ready to take us to the top yes here i am okay so the link if you want to follow along is party dot space what's the company doing how do you make money uh so we have started from virtual patches and now we feel the data-driven corporate culture for remote teams okay and so how do you do are they paying a subscription fee as a consulting business uh at the moment uh we haven't released the products for messages yet and we don't have any subscriptions yet uh despite some clients already asking us to provide them with such an option so uh what we do we have uh we ran and hosted number of parties some of them were on our basic products and some were and something completely unbelievably cool and i'm gonna tell a little bit more about that so just to be clear your pre-revenue today you're planning to launch here in january of 2021 like this month is that accurate uh yeah january february we're gonna have a release uh but we have already earned something in 2020 something like uh 200k okay and what did you make that money from uh so we ran uh one of events for tech companies oh so you run so tech companies hire you to run events and you're their events team uh so where will i call their events on our platform uh sometimes we partner up with event agencies uh for bigger events sometimes we host them uh like solely How many customers do you have how many customers did you uh did paid you something in the past 12 months um probably around 25 okay around 25. so they so they each pay you sort of eight or nine thousand dollars a year or that or no no no the distribution is not that even so we have uh one big client paid us uh almost 200 000 euros for one off event and we have like a very bigger number of smaller events for uh 300 each What are you waiting for what are you waiting for i mean you know hop in just you know is growing like i mean this is right now as a time to be launching a tool like this why aren't you guys out there in the public like right now why are you waiting yeah so hoping inspired us to start party space in may we saw that virtual event space is going to be hot uh but in september uh we have found we identified that corporate events are also going to be huge uh because companies clearly lack and instruments to preserve and even to build a corporate culture for distributed teams and this september so we had a prototype of 2d product of party space uh and it was clearly something that was good enough for people to treat it not as zoom but as a party space yeah uh but one uh tech giant leading stream service uh challenged us so guys can you make us a virtual party in 3d and they said so it went gonna be on the same in like third of december it was two and a half months and my technical team uh how many people on your team so uh i have two technical co-founders and uh we have hired like five more people uh to support this event so there's eight total yeah and then and the three co-founders did you guys split 33 33 33 yeah yeah something like that okay great okay it's almost like that uh yeah so the tech giant challenged us to make the party in 3d and uh we took this challenge and delivered it and we saw that engagement numbers are like 10 times better measured by what what does that mean engagement i mean uh level of participation of uh people in activities so uh virtual events for corporates uh in this case it consisted of like main show group communication for teams and group games and we saw that vast majority of people participated in almost all activities old games and some people even communicated to more than hundreds uh 100 people during the event how many employees from this big tech company showed up for the event so it was a set of three events and uh in total it was like uh three and a half thousand people oh wow which tech company was it uh i cannot say it right now okay uh maybe maybe when's the time of the interview you're going to be a liar we will be allowed to tell this in public so when you right now if i go to your Pricing page pricing it says request a question quote i i guess you're probably experimenting with this right now when you do release pricing what do you think you'll price this at uh i was truly amazed but i saw that uh for our 3d project companies are ready to pay uh 100 per visitor for which for one event uh so when you're in amazon and you would like to throw a end-of-year party for your employees you can budget that much so Corporate events you think you're going to cater really to internal team events not like you know out coachella these sorts of things uh yes and the idea behind that is when you let people who know each other to meet online uh level of engagement level of satisfaction going to be much higher because those are your colleagues and that's the corporate culture how much money yuri did you guys spend on building the mvp uh so mvp was built from scratch for zero and uh in this year so uh we were almost uh in a break-even situation uh taking into account this client mm-hmm okay so and what revenue what revenue do you think you'll do next year oh i hope i'm targeting for hoping like uh objection next year so hop in just crossed a 20 million run rate uh up from about a million dollar run rate 18 months ago you think you can break 20 million in revenue next year up from basically nothing this year uh yes we can do that uh so we are in a their situation like uh when we go not from the bottom down to corporates but from the top and the list of companies that are looking for our solution is now uh amazes me how many leads do you have currently uh so currently uh we have like uh so if you combine our 2g and 3d products it's uh around 30 uh really good qualified leads what do you consider qualified lead more than how many employees uh yeah so for us qualified lead is a client that can potentially buy the subscription so one of events are not sexy the sexiest part is providing a subscription and for subscription we are developing a set of uh like smaller products that uh human resources people experience culture team gonna use to engage in place and those are like games quizzes uh onboarding tools uh instruments to manage uh alumni and what's the cost of the subscription uh so we are now in price discovery for subscription and uh i hope we can end up on twenty dollars from play but uh ten dollars now seems to me pretty how many employees do you want companies to have in order to like talk to you at all or you think you can add value uh so uh our current pipeline uh should give us like 300k in uh irr so sorry my question is for a company that's using you how many employees do you want them to have where they'll get real value from your platform uh i think it's both good fit for smaller companies and biggers but i i see the sweet spot in companies for 500 people because they start suffering from losses from lack of culture mm-hmm interesting now have you built all this bootstrap have you raised uh we have raised like tiny angel financing uh part here in ukraine and also we have angels from the us so they work for google and like bigger companies so how much sold did you raise uh we raised uh also under 200k so it's uh 160. okay so with the angel Financials investment of 160 000 plus the 200 000 revenue you had about three 360 000 to work with this year obviously you're going to release the product pricing early 2021 and hopefully grow up to a healthy run right on your subscription product yeah exactly so we have three months of runaway and uh i hope clients also gonna make some repayments uh in january so you have three months of runway right now so what does that mean how much cash is left in the bank um it's a little bit more than 100k okay so you're burning about 30 grand a month oh it's actually not it it's actually 180 k yeah so uh we're burned around 60k per month okay okay got it so burning six okay so about three months of runway left um that's that's not a long timeline you have to feel a little pressure there i imagine uh that's the way i live because if i let myself myself relax we're gonna stop hustling and we're gonna stop making cool opportunities like one of lifehacks what we did we have offered uh european uh waci funds to conduct christmas virtual parties at party space and now after they're gonna have good time on our platform uh i don't think we're gonna have problem how many fundraise how many of them have actually run an event on your platform uh so uh two of them are committed for christmases uh two funds already made the virtual happy hours and uh i think we can add three more to the list Beating Hopin and and what makes i mean this is like a cheap shot question but i think it's an important thought exercise i mean do you feel like you have some advantage some unique acquisition channel distribution that will allow you to beat hoppin in other words if they just copy your code and it's just a game about distribution can you beat them uh so we don't compete with hoping because hoping is not providing corporate yeah but why can't they just hire five developers and build what you've built in like three days uh because uh first like the we have proprietary streaming tech uh box solution was way too expensive for us so we have decided to make it from scratch and uh it came out to be like flexible enough to fit a needs of event organizers because uh when it's a conference everything is very plain and simple but when it's a 3d venue nightclub uh in virtual space you need to really make it creative otherwise it's going to be boring okay makes sense well listen we're rooting for you that's for sure let's wrap up here with the famous five number one what's your favorite business book uh okay number two is there a ceo you're following or studying uh right right now i'm looking for uh hr blogs and uh like gitlab is doing probably the best job and say human resources number three what's your favorite what's your favorite online tool for building the business uh prospecting ireland what's up prospecting i haven't heard of that yet prospecting okay uh number four how many hours of sleep do you get every night uh i sleep eight hours and what's your situation yuri married single kids uh single a little bit fundraising and uh fully committed all right so no kids and how are we just space all right 28 28. last question what's something you wish you knew when you were 20. uh i wish everything stays the same so it's not something you you want to change just a piece of information you wish you knew uh probably i wish i knew more on bitcoin but that's very cheap shot guys there you have it party.space a corporate version of hopkin that sounds like a lot more fun they bootstrapped with sweat equity three founders own about 30 percent each they raised 160 000 an angel did 200 000 in revenue this year on sort of a custom deal but they're moving into peer subscription next year they look to scale i have 30 corporations on their lead list looking to charge you know thousands and thousands of dollars per se for for these events charging on a per attended seat model we'll see if they can scale thanks so much yuri for taking us to the top thank you nathan thank you 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 buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on 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