How Performancelivestockanalytics CEO Dane Kuper grew to $1.5M revenue and 850 customers in 2018.

hello everyone my guest today is dane cooper he's a pla co-founder brings a breadth of experience and vision to performance livestock analytics he currently owns a progressive agricultural enterprise that consists of raw row crops and livestock based in northern iowa now he's building cattlecrush.com dan are you ready to take us to the top yeah you bet all right so tell us what cattle crush is what and what the business model is how do you make money yeah so we're a we're a sas platform for the livestock industry um so we provide a software platform that livestock operations manage their data on and tell us again tell us about like how an average customer might use you are you talking sm like smaller farms mid-size farms or enterprise scale efforts yeah no i it's it's all the above you know initially we worked with a lot of small medium-sized so kind of the smb market as far as the livestock operations because they were just operating offline when you look at how they're operating their their farms or agricultural enterprise um so overall it was a it was a market that was really addressable and accessible and really was lacking the technology they needed to manage a multi-million dollar business so when you look at your your your companies today using you on average what's company paying you per month for access to your technology yeah could we charge 150 a month per subscriber for google farms okay and when did you launch this company what year uh we launched it in 2015. 2015. very good and now were you already running your own you know row crops things like that before then and then you built this for your own need or yeah that's right so i you know out of college i went and spent seven years in silicon valley uh working for different ag tech companies out there and really we were focused on revolutionizing the row crop industry and really from the efforts out there working with a lot of different software companies is livestock was a missed opportunity that nobody was really focusing on uh forty percent of the agricultural gdp uh in the world is through livestock so it's a it's a huge still niche market that was just lacking focus and needed digitization so it was a market we targeted um and focused on as we launched in 2015. and what have you scaled to today in terms of total customers on the platform so we have about 850 customers that individually subscribe to 150 a month and then we have several enterprise agreements so we have several channel partners that we look through our go to market strategy um that we have partnerships with from an enterprise level that we're doing some software integration and some hosting and branding type revenue model type stuff within the business too 850 folks at 150 bucks a month puts you at about 127 000 bucks a month right now in revenue is that accurate yeah that's right i mean our mrr from our direct customer base is right around that 1 30. so okay yep and then take us back take us back a year where were you a year ago per month um we were right at uh let's see here it was right at 7 000 a month oh wow okay so you really just turned things on about a year ago we launched the platform roughly about 18 months ago got it okay so how are you supporting yourself between 2015 and you know 2017 yeah for sure so we you know initially we looked at it uh we bootstrapped it uh for the initial angel type round um so we had a small you know myself and a co-founder started the business with bootstrap funds prior company we were with sold for 930 30 million dollars we had an employee stock payout uh that really we were able to which company was that there's a climate corporation okay yep um so it was required by monsanto in 2015 uh really kind of gave us the bootstrap funds and then we did a uh about a 500 000 uh safe note uh with some friends and family agent investors within that safe structure and then we just did a two and a quarter million dollar equity round so total raise today is about 2.7 million that's right okay very good and then um the the 2.5 you just raised i mean when did you raise it one month uh last month okay so literally just recently what's the plan with the capital how are you going to use it to drive more growth um we're we're really effectively doubling our team when you look at a software development and then field sales um and then we're investing into additional revenue models too so right so we have initial growth within some of these enterprise type agreements large feed nutrition companies and and we want to execute at a higher rate in the field just getting the software subscribers you know an early leader in the market we kind of stand alone within the domain we're in not many competitors and we just want to execute at a higher level and and gain that market share so you look at software development sales and then a few strategic roles so and what's your team size today oh we're a 20-person team today all in iowa um some in iowa some remote you know when you look at our software development teams some of them are remote but i'd say about half of them are in iowa and then you know our sales field team is regionally based so you've got south dakota nebraska illinois kansas so they're they're based within their geographies where they're supporting that customer base yeah and tell me more about churn that's obviously critical in any sas company what's your revenue turn annually today and how are you keeping that low yeah it's it's super impressive so our churn over 850 customers has been three customers and how much revenue they represent so they represent about 5k okay okay got it so you've got about call it five percent than annual revenue churn something like that uh yeah i mean it would be less than that when you look at today's you know today so we have three total customers that have that have turned off the system you know our average customer used the platform four to five hours a day um and when you think about our business it's unique it's facebook type daily active usage in the sense that these people use it every day to feed their animals it's a workflow that literally happens every day is our animal like i don't know livestock just forgive me even my mom works on a ranch that's the only context i have this isn't seasonal right i mean like there isn't a part of the year where all the ana i hate saying this it's horrible where all the animals are slaughtered and it's like you don't you don't you don't birth new animals in that period right i mean so when you look at you know offspring of animals generally it's in the spring but when you look at the feeding business so actually uh raising those animals to to their harvest endpoint um it's it's your own okay yeah they need to be fed every day got it and so what your technology how does it actually work i mean is there a piece of hardware this or is it like a mobile app the farmers are downloading yeah so it's a it's a software hardware combo so um there's a there's a scale head actually on a feed wagon that a farmer uses to feed his animals we do a bluetooth connection to a cellular ipad and then feed that into our cloud-based data management system so you know the first thing we did effectively was automate that data flow in the easiest way you could think possible with minimal hardware so is there literally like an ipad attached to like the grain feeder whatever you're feeding the livestock on like what's actually attached to the equipment yeah so there's an ipad in the cab there's a cellular ipad in the cab and there's you know what in the in the cab of the uh tractor or the truck okay okay so there's a a tractor a truck that actually pulls the feed wagon and so they actually use that cellular ipad interface to feed those animals and then it's just pinging that bluetooth device that's on the scale head interesting and what data are is being sent back to your software platform via the bluetooth connection so that bluetooth connection is really just reading the in and out weight of feed ingredients in that in that feed wagon and then the actual mixture that's being fed to each pen of animals out of it so you think of a recipe and you're you're putting certain amounts of ingredients in a recipe and on a weight base and they look at that interface as they're loading those ingredients and then as they deliver it basically our interface shows them what to put in how much are you manufacturing the hardware yourself or no you just saw them buy an ipad download our app buy an ipad download our app yeah yeah and we we actually distribute the the hardware device but we don't well you make them pay for that right or are you subsidizing and getting it getting it for them to for free no they pay for the they actually pay for the uh bluetooth device yeah and then the software is 150 bucks a month that's right i see interesting do you have any meaningful ways to drive expansion revenue right now or no um yeah we do so you know if you look at to date our main revenue growth has been referrals right throughout my career i've never seen a business that's been referred organically from one customer to the next um and then you know right away we directly went after the channel market so you have large feed nutrition companies like land of lakes cargill and several others that actually advise these producers on how to feed their animals yeah dane sorry just being a trusted advisor when i say expansion revenue i don't mean adding new customers those are great strategies for that i mean actually expanding customers that signed up a year ago do you have pricing axes that allow you to drive those people paying you more than 150 bucks a month uh yeah we do i mean there's revenue models we're working on now for that as far as product distribution okay so none yet but you're working on it yeah that's right got it um what do you think you'll upsell against so if i sign up today for 150 bucks a month a year from now you're going to say hey we have this new thing you can pay 300 bucks a month like what are you going to upsell against is it like number of heads or number you know weight of grain distributed or what um so for us it'll be additional capabilities within software so no database up selling it's going to be product based up selling it'll be yeah it'll be product-based upselling for the most part interesting why not sell against a pricing axis that is actual quantifiable like data driven like number of heads or or weight of grain distributed i mean that seems like a direct value metric right look it's it's something that we could do but if we look at a 12 to 24 month path it's all about market adoption because migration off our system is going to be super tough um in the long term and so as we have the early lead we don't have any plans within the near term to actually increase that pricing based on a per head or the amount of ingredients that are being fed through it specifically because we want our pricing model to be easy um and we're just executing on scalable sales yeah but dave just to be clear sorry a farmer that has 10 cattle they manage is going to pay the same as land of lakes it's managing a million cattle is that accurate um so that's not exactly accurate so it's based on a per location basis okay ten cows one location the other one has a thousand cows at one location they're both gonna say pay the same price that's right that seems crazy to me one's getting like way more value um it i mean you could think it's crazy to you but it's it's really a market adoption play for us right the subscription model but if they're already adopted they're already paying all i'm asking is how do you get them from 150 to more like they already adopted you they're already paying you right so for us it's an additional product upsell right so additional capabilities and additional products and our ways we can reach new revenue models within other things we can bring them since they're on the platform yeah yeah interesting um you talked a little bit about channel strategy already um what are you paying in terms of a kickback to these folks if they bring you paying customers nothing okay so it's there there is no incentive other than you built a great product that's right okay and they they have a great amount of benefit by using the product right they have instant accessibility of the data on farm oh so if a channel if a channel gets farmers and their network to sign up with you they get to see all that data yeah that's right i mean if if the farmer shares his account with that with that nutritionist or consultant well they i mean that's the incentive for the channel to get them signed up they're getting no no money from you but they're getting a massive amount of data if the farmer turns that on that's right yeah they have just an intelligence center that from their home office where they can see all the data and make better recommendations yeah um of your team of 20 anyone just sales marketing yeah so about uh eight of our team members are sales and marketing okay so when you add up all your sales and marketing kind of head count any direct paid spend on ads conferences things like that what's your fully weighted cac to get a new 150 a month customer so it's so we have um so we figure our cost of customer acquisition is about two two months of subscription about 300 bucks yup yeah that's i mean that's a healthy payback period that's great very good all right let's uh let's wrap up actually one last question here on cal you've capitalized so you mentioned you just did equity i mean did you ever look at using venture debt so that you didn't get diluted um we did look at some of those different avenues um and it didn't it just didn't seem like the right the right path for us overall i mean for us we were interested in finding a good equity partner that could help us financially but also help us in the industry yeah so it was definitely strategic and it was a family office investor yeah um and so it was a it was a fair and equitable equity round to where uh we didn't see complete dilution no negative covenants you know it was a really good about warrants that's right yeah um well hold on it was an equity round right they bought equity yeah yeah yeah yeah yeah very good all right let's wrap up here dan with the famous five number one what's your favorite business book uh on becoming a leader by warren bennis number two is there a ceo you're following or studying um no not necessarily i like to collaborate with a lot of other startup ceos and leaders they fight the same battles and a lot of good collaboration within that number three what billing tool do you use billing tool yep um well we use stripe for an automatic payment okay number four how many hours of sleep ticket every night eight hours and what's your situation married single kiddos um marrying with two kids two well and how old are you dan how old are you i'm 33 33 last question what do you wish your 20 year old self knew um probably more the just had better self awareness of of ag tech in the market um so i wish i would have discovered more things when i was younger right reached out and uh versus just going to college like you see a lot of standard people do today so i think there's opportunities to reach out when you're young you're just not in that mindset when you're going to college so i think discovering those opportunities and being part of that ecosystem would be very valuable guys keep your eyes open even when you're wrong dane is now working with over a hundred and sorry 850 farmers that pay 150 bucks a month to do about 127 grand per month in revenue helping them manage and measure and automate and understand the data related to feeding and cattle and just managing all the head of livestock that they're they're managing across these farms he saw this opportunity after being hyper focused on really optimization of row crops back in silicon valley now launched this company capitalized with 2.7 million bucks in capital 20 million sorry 20 people on the team between iowa and remote locations about five percent or less than five percent revenue churn per year getting ready to add additional products drive upsells and in terms of acquisition spending about 300 bucks to get a new 150 a month customer so two month payback as he looks and doubles down on market adoption via channel partners dain thanks for taking us to the top yeah thank you very much