How Perkville CEO Sunil Saha grew to $3M revenue and 2.3K customers in 2023.

hello everyone my guest today is Sunil Saha he's the founder and CEO of a company called perk fill a rewards platform for local businesses he started the company helped SMBs compete with large companies by giving them a powerful yet affordable program he now works with companies of all sizes with over 2,000 locations and 1 million consumers participating every single month Sunil are you ready to take it to the top let's do it I love this name perk fill it's like I feel like it's a game I can play or something yeah it was actually very contentious when we started the company my wife hated it she co-founder she is not you know she's an important stakeholder in the whole equation when you're starting a company and we held firm and now she likes it so she was turned around what changed her mind I think the success that we've had and you know it's been resonating well and our growth I think that that's what ultimately will turn around your spouse yes how do you measure success what metric do you use yeah I mean for us I think it changes every year in the beginning you know we're in Silicon Valley so it was about raising money and so you're gonna be ready we've raised about five million total okay yeah so are getting you know some funding underway so you can pay yourself and then now it's really about profitability that's really our goal for 2018 we're very close we are you know maybe 10 percent in the red right now and 10 percent of top line revenue of top-line revenue yeah so we're very very close that's not and so we should hit it this year we're feeling good about that and and a little bit different than your typical Silicon Valley company which goes on to raise 50 to a hundred million which we may still do in the future but we want to prove we have a model that works and getting profitable you know really shows that yeah I am a much bigger fan of profitable companies that have raised no money than I have you know hundred million dollar raised companies that are burning cash like you know well like not a good thing right all right tell us more the back story when did you launch the company so we launched in 2010 and honestly I think we were a bit early because what we discovered is you know we were focused on small and medium sized companies and we discovered that the owners and those businesses are extremely busy they don't have time to do extra work to manage a or program consumers also it's very hard to change their behavior and get them to take extra steps at the point-of-sale so we tried a variety of approaches to solve the problem some of which you may have heard of I don't know if you've heard a belly card for example out of Chicago where they had the iPads that sat at the cash register we did some of those approaches before they did even and we quickly learned that the only way for this to really work is to integrate it to the point-of-sale system that the business used and that way it was completely automated both for the business and for the consumer and so at the time in 2010 there were not a lot of point-of-sale companies that had an API that you could hook into a few years down the road a company called mind/body online you may have heard of them it is my Booker yeah they just bought Booker that's right they're the leading player in the health and beauty space and they were one of the first to come out with an API so we integrated to them and that works beautifully especially in the yoga sort of Pilates space you come in take your yoga class you get points you can redeem those for you know free classes namaste everyone's happy and so that's scaled well that actually put us into the fitness vertical and since then that's been our primary vertical to date and it's been nice because we're now the leader in that space so when I whenever a company is thinking about a reward program if you're in the fitness space you're gonna think about peripheral so how much is my body acquiring you for yeah they've certainly been you know on a little bit a little bit of a spree here lately and you know we still have a lot of growth to go so it's early days you can barely say that without smiling so if two weeks from now i see the headline I'm gonna go Sunil oh I should hit him harder on that all right so okay good so that's good so launched in 2010 you raised five million bucks tell us more I kind of skipped over this tell us more about what what it does so it's integrate interest in the point-of-sale system describe how a consumer like one of my listeners when they go to their local fitness place how will they experience it yeah exactly so basically all you have to do is have an email address on file with the business in their system and so you go in you check in at the gym or you get a haircut at your salon or you take a yoga class you automatically earn points and you get notified by email that you've earned points you then join the reward program and I was at LinkedIn before so we took a lot of the tips and tricks from LinkedIn and applied them here where to attach an invitation gets sent to you just like you get invites on LinkedIn and that invitation is what gets you engaged in the reward program so that's that's a key key one the other one I would say is at LinkedIn we a be tested everything and we do the same at perk fo to really drive results for our clients we a be test every flow tool do you use for that to test your flows a B Testim so we use a number of tools we use as tool called send with us which is an email a B testing system it integrates to SendGrid which I'm sure you've heard of there's a new company that actually is very exciting called Intel um eyes my previous boss at Yahoo co-founded it and the CEO growing very fast what you call again Intel um eyes and what they've done is they've taken they worked on the yahoo front page and they've taken the learnings from that incredibly I mean there's probably no page that's been more a/b tested than the Yahoo homepage and they've made it to where any company can use that type of technology ok good so you use those pieces of tech they once the email is there you gonna invite them boom you automatically rewards you know I don't have to do anything extra at the register which was you said the big friction point earlier on yeah well you ever get into the hardware game where you're actually making your own POS systems I mean square kind of did this right you know well we our aspiration is to be cross vertical we're in the fitness vertical today we're in some salon some spa some retail there's huge opportunity as this technology continues to evolve rather than get into the hardware game which we think would tie us down into a specific vertical we think it's smarter to partner and integrate with existing players in those phases ok and what's the pricing model I mean it's a pure play SAS model or what pure play SAS model so we start off at $99 per month per location up so you know 149 per month so that's kind of the range and the bigger you are you have more location so you pay more yeah what would you see the averages per location the average per location is probably like 120 a month yeah and what what is the difference between what I get at 99 when I get a 149 it's really based on the size of the business so you know you have some really small boutique studios you may have two or three hundred customers so you have some help clubs that may have five thousand so it gives us a little bit of wiggle room there to make some more from the bigger clients versus the small ones why is such a little difference I mean someone with 5,000 clients should get you know 5,000 X the value from zone with one client but your pricing doesn't reflect that yeah I mean you're kind of there's kind of a bound that these companies are used to paying with other SAS products so you know if you get outside that bound then it gets harder to close deals so we're kind of in the sweet spot there the other thing is typically if you have three or four hundred clients you're charging them a lot more money per client than if you have five thousand I see so it's not quite as big a difference from a revenue perspective yeah what have you scaled to now today how many how many locations are you in we're in about 2,300 locations mostly in the US but around the world as well and across how many logos how many brands about a thousand brands total okay it's pretty good so I mean can I multiply the 120 per location times train 300 you're doing about what 276 right now per month so you know we've been around for a little bit we've experimented with pricing so it's a little bit less than that you're in the ballpark but just cuz you get maybe discounting early on or things like that different models that we tested exactly okay got it what can you put a minimum though on them like are you definitely north of 200 200 okay that's there by the way it's very typical to do pricing experiments early on and you increased pricing over time so okay good what about churn turn it's tough in this kind of business because they go out of business a lot yeah I know turn is is a challenge in small medium sized companies especially with a marketing tool because it's not as mission-critical as your point of sale for example so you know Archer is actually in a very healthy place right now and it's been a it's been a struggle to get here but you know we're now in about I would say 3 percent monthly absolute churn or gross churn yeah and about percent 2 percent revenue churned yeah that's three percent logo 2 percent revenue and sorry you said gross or net logo churn gross overturn got it yeah per month that's great yeah and 2 percent revenue in turn that's good so you're churning less or paying customers which makes obviously sense there what about cat what are you paying to get these guys so our tack is low I mean right now we're around three-to-one CapTel TV and you know I think that's kind of the floor of where you want to be and that's also been a struggle to get there but we've made it and I think we want to get to four to five that's where we want to see the business go and we're making good progress in that direction with 3% logo charm per month you could assume just by division that it would stay with you for about 30 ish or months at that 80 90 dollar price point right so that's like twenty seven hundred bucks and LTV is that right now well you paid your LTV yet yeah I mean our LTV is a little bigger than that because the average business may have more than one location and so you know we're a verge is about 140 per month per location okay so what I mean what talking three grand 4 grand LTV is pretty but you back on the napkin it yeah in that range okay I got it so I mean look if it's 3 grand LTV and you have a you know of the ratio between LTV and caucus for you're willing to pay up to 750 bucks to get that customer get location yeah that's interesting and and how do you get that even inside sales team or is it just pure paid direct spend so we have an inside sales team and you know what we try and do in the beginning in the early days we used to do a lot of sort of discounts and you know first month free etc and we're really we realized that leads to higher turn at the end of the day so we've now really focused on educating our customers educating our partners doing a lot of Co marketing through trusted partners because like my body is a good example you know those businesses are direct targets for us they use a system that we integrate with and so that Co marketing is the most effective way for us to get new leads into our funnel you pay my buddy a kickback they do get a revenue share yeah that's yes all right and what's your team size today 13 13 people and then payback period I mean can I just take the 750 divided by the about 140 per month and assume you're getting what is that like how many months is that but uh five months six months payback period I would say it's probably because there is some revenue share in there so that impacts the LTV a bit so you're probably getting closer to eight nine months in that range that's dope that's I mean that's still healthy right so so let me ask you a question right so if you're doing around a hundred 90 grand right now per month that puts you at about what is that like a 2-2 three in terms of ARR run rate if you've raised five million though in capital and assuming he only sold ten twenty percent of your company on those rounds I mean you are valued at something like thirty 40 million it would be tough for you to find someone to give you a 15 X multiple on 2.3 million to like buy the company so like do you ever worry about how to get out from under these you know the liquidation preference you haven't and to grow into your last rounds valuation yeah I mean I would say we probably you know sold more the company than that so not quite as rich evaluation is what you've said so we don't have a net you know we don't have to grow out as big a hole I think is what you've you mentioned third so we're a pretty good place to return to our investors you know a decent return and we still again have a lot of growth ahead and the nice thing is being profitable gives us the options and that's really you know one of the reasons we've focused on getting to profitability we will then have the option do we continue growing organically do we you know get acquired do we do another round of financing polish maybe with a partial buyout you know those options will be there without being like oh my god we're gonna run out of money which is not a fun place to be yeah one honey today per month where were you about 1314 months ago we've been growing about 15 20 percent a year that's not bad okay so your own about but what it was that 150 something like that 12 months ago yeah yeah good okay let's wrap up here with the famous five number one what's your what's your favorite business book favorite business so a recent one that I've read is called seven powers by Hamilton Helmer mm-hmm and it talks about the the things you really need to do to drive outsize return for your investors things like scale Netflix is a good example of that brand Tiffany is a good example of that so it really helps to the CEO helps you focus on those critical aspects of your business number two is their CEO you're following or studying right now there isn't a single CEO what I found is I like to read books that are written by other CEOs so Andy Grove or previous CEOs Andy Grove I love all his books Peter Thiel I love his books as well that's kind of the the approach I take number three you know what's your favorite online tool for building the business oh man the two tools I'm in the most I would say are HubSpot and QuickBooks and QuickBooks is kind of my scorecard you know that stat shows me how I'm doing on a day to day basis in terms of getting the profitability and HubSpot that's how I lead that's how we get our leads so that's how we grow number three how many hours of sleep to get every night you know my wife is good she gets me in bed by 10:30 she's like you're coming to bed so 10:30 11:00 I'm in bed and I am up at 7:00 so number 8 hours of sleep at night that's good and what's your situation arey any kiddos or no two kids two and four oh wow and how are you I'm 43 all right Sunil last question what he was your 20 year old self knew ah you know I was thinking about this before and I think managing a pl if I had had more experience with that before I think that would have really helped in the early days of profile just managing the money tightly so I just you know anytime you can get that P&L experience early in your career I think it's a great way to go learn financials earlier from Sunil found at Parkville in 2010 now doing about 2.3 million bucks per year and AR are growing 15% year over a year they've got healthy economics they serve over 2300 locations again helping those locations create loyalty systems that actually work perks that work because it's built directly into the point-of-sale system they make again about 83 bucks per location on a weighted average obviously current customers are signing up it's closer to 120 but they've got about 2,300 locations so good reach they pay about 750 bucks to sign up a location lifetime value on that CAC is 3 grand so healthy ratio there they get their money back in about nine months with their team of 13 based out there in Oakland five million dollars raised snow thank you for taking us to the top thank you great to be here