How Penji CEO Khai Tran grew Penji to $21.3M revenue and 1K customers in 2024.

hello everyone my guest today is jonathan grazbowski he's the co-founder of penji a platform that gives you on-demand access to the top two percent of designers in the world you can submit as many products as you want get your completed designs back in under 48 hours and only play pay a flat monthly rate his personal mission is to empower the next generation of entrepreneurs to challenge simple minded patterns that help elevate execute and produce more revenue for their business johan you ready to take to the top let's do it my man so walk me through this i mean my old way of finding designers was like you know get a decaf coffee late at night open up dribble or behance scroll through and heart designs i liked and then try and manually reach out to the designers and hire them you're solving this problem yeah i think that strategy still can apply um but i actually would say that you could still do that and send the examples over to pengy and then we would design exactly just that but yeah it's ridiculously hard to find talented graphic designers dependable graphic designers and that was our problem when we were working as an agency prior to coming up with png and now we give access to as mentioned the top two percent of graphic designers in the world they all have to do is sign up for the service they have a 15 day money back guarantee if they like what they receive they can continue if they don't we part ways we understand we get it so walk okay so this spun out of your agency let's go back to the agency here for a second what did you launch the agency in oh man i'd say 2012 2013 2013. okay got it 2013 and then um how what was your best year in terms of revenue at the agency oh man probably like 200 at most uh and that didn't happen until four years into actually just making it like we were it was enough to pay the bills but and it was only like maybe four people five people to the max um and we knew we had to pivot because a lot of the stuff that we were doing as an agency just wasn't fulfilling um but the one thing that was consistent was a lot of people loved our graphic design um as you may know it's extremely tiring networking going to networking events at least for us we started local and we went to those like you know bni meetings we went to those like networking events that just for me as a young guy i was 24 at the time um i was the youngest guy in the room networking with people that were two times the the age of myself so it made it very difficult and through those struggles we we knew we had to pivot we knew we had to do something different and make it more accessible for everybody so what year did you officially shut the agency down and go on on png uh well we actually the first year of png was four years ago so around 2016 um 2017 we stopped the agency at that time and a lot of the revenue that we were receiving from penji and the savings that we were able to do got us through the initial spurts of what penju was able to do so we're actually bootstrapped we've never received an ounce of funding we've don't plan on ever looking for funding et cetera and so how much of your own agency capital did you put into png before your first dollar of revenue um are you looking for a dollar amount because the dollar amount isn't really all that high it was more so the technology we were using the capital our capital of people that we had in order to design and in order to um in order to build but in terms of actual cash we really didn't put up much in order to make it and make it run we did everything in the background and then we were fueling punji as we were getting customers and so we were using the revenue from penji initially and driving it back into uh advertising local marketing and things yeah that's right advertising until i wasn't saying what i'm trying to get at is founders that can figure out how to get their first dollar revenue without spending anything typically are like the best founders now sometimes they have a bunch of cash they're sitting on so they spend a bunch before the mvp what i'm just trying to get a sense on even if it's a very small amount of cash is is how much risk how much trouble did you put up pre or first project process through png from a paying customer do you know i wouldn't i would probably be i would i mean i don't know if this is the right answer that you're looking for and i don't i still don't understand the full question but i would say zero because we didn't spend any any dollars at all so you had no employees that that helped you build it you you coded it yourself penji in particular zero waterfront media we use the the leverage and the the uh the resources from waterfront media which was the agency to fuel that so i mean if you're looking for that i would say in all maybe 50 to 100 000 got it so just to be clear you had developers at waterfront agency who you were paying via the agency you just said hey spend three hours a day on building this new png tool correct yeah any downtime that they had that they weren't working on client work we had them work on png exactly right okay so what's waterfront today did you guys sell it or is it just shut down all developers are now part of png yeah we shut it down um we shut it down completely there might be a time where maybe we might consider opening it back up but at this point penji's doing well and we don't have a need to actually do it but yes everything that was once pengy uh was once waterfront media we actually did something very interesting we fired every single person on waterfront media and then rehired them under penji and that was a very emotional thing that we did we actually sat in a meeting we gave them a slip that says you're fired basically it was a little bit nicer than that we watched them tear up and say like how could you do this to me and that emotional thing that we did was was so needed because we needed to strip away that like uh everything that we once did and remove that mental block in order to focus on the future and what we believed was the future and that was penji so how many full-time folks are at panji today there are over 125 125 and how many team members did you have in year one 2016 i would say like people i would 25 somewhere around 25. you brought 25 people on full time like pretty quick which means either you put a lot of money from waterfront agency into supporting benji or you didn't well you didn't raise capital we never raised capital we got a ton of customers and we just were really smart with our money so we put out a survey before our customer or before we created png and said hey if we build this will you come essentially and we got a pretty decent amount of people that were interested in actually what's decent uh we interviewed 250 people okay got it and we did a lot of we have designers in-house from the agency prior to and um so we're doing a lot of the graphic designs ourselves and actually through trello and in the background while we were raising not raising but while we were earning uh revenue we were building uh what what we have as proprietary to us which is the technology arm which is our our core strength to this day uh and then we were just again fueling there was a time where i i didn't receive a paycheck for uh close to six years of just uh of saving and just driving it back into the business how did you pay your bills how did you eat um we did take money when it comes to the necessities but in terms of an actual paycheck it was never received i had my rent and money in terms of food uh covered but in terms of anything else i did net off we just literally put it back in i could say in full confidence i think i spent close to anywhere from a thousand to twelve hundred dollars a month in when it comes to rent and food so you're all in cost in 2016 2017 you are able to keep your personal living expenses under 2k per month so you could reinvest everything yeah i eat dirt for literally four to six years man and i and honestly to this day like real talk i think that was the reason why we are where we are today if it wasn't for those it wasn't just me either it was me it was my co my two co-founders like we sucked it up we lived together for a period of time um we made a ton of sacrifices both uh physically emotionally spiritually with with family etc yeah we ate dirt so let's now walk through like the business model right so you you send us a way out to 250 folks who are already doing design work for at the agency what did you pitch them did you say hey pay 200 bucks a month to try png like what were you actually pitching them yeah we were pitching them unlimited graphic design for 79 a month how does that work it didn't it didn't work at all it was terrible it was a terrible idea i think we got our first hundred customers in under four or five months um and some of them were paying 79 some of them weren't uh we had a really good outreach strategy what did most people pay you 79 bucks on the bottom end to how much well now it's a little bit different now it's much different but those are 500 though...