Plutio Revenue & Valuation (2020)

hello everyone my guest today is leo bassam he is the founder and ceo of a company called pluto.com leo are you ready to take us to the top i am all right what's the company doing and what's the revenue model how do you guys make money no i so plutio is an all in one business management and productivity platform designed for freelancers and small teams we make money by selling a subscription okay and what do people pay on average kind of per month for this um we have three plans um start 15 ends at 30 with add-ons for white label and other things and currently we're at four four thousand pounds in recurring revenue which is which is roughly six hundred dollars a month that's great so i want to talk about kind of how you got to the point where you then released the product to market got your first customers but right now they're paying about 30 bucks a month and how many customers do you have um paying customers 600 okay about 600 paying customers and you said they pay how much per month um it varies so from 15 to 30 and plus add-ons okay so if i take 15 bucks times 300 that's uh you said that you're doing right now about six thousand dollars per month around that one yes okay got it six thousand um and and how did so how did you get i mean first off let's put this on a timeline when did you launch the company what year so we i started working on it three years ago uh during college and officially launched november last year okay great and how did i mean how did you get the first 10 customers so we did get them through websites like beta lists and directories direct to directories like that sorry what list betaliss.com beta list yes yep um but we actually did our soft launch with appsumo which helped us uh get quite a lot of beta testers outside yep um walk me through how beta list works so we basically submitted a website there um we paid for it so it goes there quick quicker than uh basically in a few days times a week or two and we got a lot of interest and so we signed them up for the pluty account and asked them for feedback and some of them just stayed with us um ever since okay and the um were they signing up for actual paid plans though are these free plans well it was freaked out at the time we did not charging until uh lost into last year yeah because so obviously appsumo deals you know they're tricky because they basically just give you a bunch of discount bargain hunters that want lifetime plans so how did you how did you convert people from that uh promotion to actual monthly paying customers um adams oh yeah so give us so give us more detail there right so how many how many how many people did you sign up via that promotion how much money did you make from that and then how did you convert them to monthly so um we've got about 7 000 users out of the appsumo launch back in last year and we just started signing them up for the white label which we launched a couple of months ago so they would have to pay about nine dollars to sign up for the white label okay and how many of the seven thousand signed up um i don't have that number in on hand sorry okay well uh uh give me a range is fine um i would say 400 or so okay about 400 went from basically one time lifetime value to a white label nine dollar a month plan correct okay and and how did i mean what did what do they look like in terms of churn um our churn is quite low at the moment um it's at five percent or so so five percent yeah that's five percent logo churn per month yes okay so so i mean yeah that's that's that's low but it's still actually fairly high to build a i mean a real sas company i mean you turn through about 60 of your user base in a year how do you get that churn lower um well we most of our customers share because of the onboarding so we don't have have any on-boarding materials at the moment and that's because bluetooth is a very it was a stage where it's always evolving and so we just reach um just reached a maturity level and we just started working on onboarding which helped um basically increase our retention and reduce our shine and walk me through what or how you're editing the onboarding what do you know you have to get a new user to do to make them sticky so i created um as i started building pluto i created a community which now has about 3 000 active members and we always ask questions we listen to them we see what they want versus where they're struggling and i always take notes of all these things and obviously i'll plan accordingly so with them so i shave the onboarding um sequence all materials with the with with them with the community what does that mean though you're sharing google docs with them i mean what does that mean um it can be threads on like on on facebook pages it can be a thread it can be uh a uh a form a survey things like that but you can't afford to do this with every customer they're only paying nine bucks a month eventually that doesn't work so how i mean how do you do this at scale um what do you mean by every customer because we don't actually do it we don't sort of go through them one by one we just go through the the um the majority of them yeah so i guess my point is five percent of them are turning per month and you're saying the reason that's happening is five percent of them are not getting onboarded properly and you're saying the way you tackle onboarding is you post i guess a message message in a facebook thread where a lot of your users hang out i mean i see intercom on your home page or a messaging app it looks like your face is there managing it so i mean if people are always messaging you asking like how to get on board you can't handle that at such a cheap price point well that may be something i need to look into well but i don't want you to just take what i'm saying as fact you might learn something i mean you might know something that i don't right so like i mean does it scale can you build the onboarding actually into the tool instead of having to rely on support and forums yeah so that's something we are working on in the next couple of months okay needs for it and we're sort of working on it right now and what's the team look like today when you say we it's only me and the developer okay so two of you guys and uh where are you based london and he's in lithuania we're still nomad at the moment so we based in london he's in lithuania but we travel all the time that's great are you um are you bootstrapping the company or have you raised really fully put straps that's great and why so you launched it back in 2017 out of school i mean did you leave kind of a kind of a corporate job or you started this right out of school or where was your head out when you launched it so um i started out of frustration from running my first business which i started fifth uh when i was 15. that's about 10 years ago um with my with dubai international airport as my first paying client so as i tried to grow that business um during the last period of my cup of college i struggled because the majority of tools were designed for teams and team collaboration things like that so i decided to build bluetooth designed for freelancers in small businesses and it seems to have kicked out and what's the number one thing that you know again a new user has to do to get sticky what the one action they have to take um the number the number one action that my users have to take to stick yes what do you know you have to get them to do very quickly so that they see the value so they stick um sign a proposal get a process sign or an invoice paid or basically a project set up a project flow set up quickly okay so right now the averages when they sign up how long does it take them to get their first invoice signed or paid so that is information i don't yet have access to which which basically made sedum onboarding quite difficult for us so we don't have to access this information just yet okay but is that kind of what you're building your onboarding around they click sign in with google then the first thing is upload the document you want signed and then send it to the person you need to sign i mean is that kind of what you're building around that's what we're trying to do yeah we're trying to show them so the majority of them the majority of feedback on getting is that there is no templates or inspiration of how to get started and so that's what we're trying to do now to show them how it can be used show them how others are using it and give them templates so they can quickly set up the flow now that beta list is done and appsumo is done how are you driving additional customer growth um it's merely word of mouth right now so it's affiliate program people just talking about it um that's mainly it what's the affiliate program what do you pay in terms of kickback percent uh for life yeah okay okay um okay uh and and how are you signing up affiliates where are you finding them um from our current customers okay so what they'll be like brand ambassadors again i mean paint a picture one freelancer how do they how do they have big lists of other freelancers or how do they market it um we are we're we're in in touch we're trying to actually get in touch with some influencers to start doing that in in a scale or right now it's just a couple of customers for example who have clients who might use it or other you know friends or things like people like that yeah are you um looking at raising capital anytime soon or no um no no probably you like the nomad life yeah that's good where are you traveling to next um we're going back to austin celebrate without sumo and then to australia to host the very very first bluetooth cement when are you back in austin um in about january got it and when you when you say celebrate what do you mean they invite all the people that have run a campaign and you guys party well no uh just bluetooth has basically been one of the tools that one of the apps that they um always sort of shown a lot i don't know how to explain it but it was it did really well and it was one of the top apps and so there's a really good connection between me and them and when we sold out our black friday deal which was last friday for we made twenty thousand dollars in 24 hours um and so it's like it was a big achievement so we won't celebrate all that together that was the cut that you got paid no that was the total amount we made okay that was the total amount they keep i think what 30 or 60 percent yeah 60 or 30. they keep 60 of that right so you're getting what like seven or eight grand or less 60 60 000 sorry 60 000 what uh dollars sorry pounds i'm confused the total deal did how much about two hundred thousand dollars okay i thought you just said twenty thousand no two hundred thousand sorry got it i misheard you okay two 200 thousand dollars and then you're saying you keep 30 of that which is about 60. they keep the other yes got it so so uh and what was the price point on the life on the on the plan 49 code 49 for the whole year or for me for the for life so how do you like what i always struggle with is when someone sells something for life you're essentially giving your word to someone who's making a buying decision that hey you pay now we're going to be around forever that's like a really hard promise to make well it's not necessarily saying that we're going to be here forever just that um you know here's our vision here's what we're building here's what we've done so far and here's what you're aiming to do and if you believe in that then you know we appreciate your investment at this stage um so it's basically just yeah but they're not just be clear they're not investing they don't have equity in the company in a sense well not investing in a company they're investing in their business because buying into bluetooth right now and the value it will give you later on for that amount of being right now will be higher well yeah but just be clear they're not an investor in your company they're not they don't have equity not have shares i mean they're a customer you're choosing the word they use the word investor which i understand but i mean they're a customer yeah but nathan when you buy into let's say you invest into buying printers for your business to buying what like printers or computers or whatever tools for your business to start a business then you're investing into these tools to help the business grow yeah no totally i am i mean i pay for a lot of software but it's all monthly i'm not paying anything for life because i have no idea what the ceo is going to go do i mean you tomorrow could decide you want to keep traveling and stop developing the company and the company shuts down but you still have basically it i mean by the way i've heard this happen many times without sumo which is why i'm bringing it up yeah me too um me too and i actually received a lot of a lot of basically a lot of people asked that same question when we launched the deal initially but um i just came out doing videos explaining to them what we're doing and it seems to work yeah i mean the reason i bring it up is because there's a lot of fun there's a lot of founders like you that get blinded by the initial hey here's 100 grand or 200 grand right that an appsumo can drive you but it actually really hurts your ability to build a long-term sustainable business because you then have to go hunt for more cash flow after you use up that cash because very few of those people then convert over to like a monthly paid plan now you it sounds like have converted a couple of them you caught 409 bucks a month so that's like four grand a month there but still i mean that's the trick is like how do you use the initial surge to actually build true recurring revenue so you can build a better and better product over time so um what i'm doing right now from the first deal i use that money to to develop bluetooth into a level where i can actually start pushing it and compete with with other competitors and the users who came from the appsumo ideal so they first give us give us funding to do that development and reach that maturity level and two they gave us a lot of reviews which helps build trust with new customers that we're going to be reaching very soon and it helped build a community which also built um you know it shows to new customers that there is something going on with activity so they helped us in a lot of sort of at a lot of levels especially at an early stage so now with with this new funding um which we did for from the last black friday deal we're going to start using it for scaling pluto pluto and using all the help we got from the appszoomer initially which is reviews activities on the community and feedback on a very you know uh early stage product which was boggy at the time yeah i totally understand what you're saying what i'm saying though is these are essentially like drugs that are like one-time hits and that allow you to put off the idea of thinking about building real recurring revenue for a longer period of time because you can keep going back to this drug and all i'm asking is like what steps are you trying to take to build your muscle which is a true like recurring revenue sas muscle versus going back and hitting this drug once a year over and over oh no this is the last time we're doing it we're not doing any more lifetime deals or black friday lifetime deals so again a year from now let's say you're traveling bank accounts are low you want to hire another developer it's very easy to cop up someone say hey let's do another deal like it's so tempting and they make it so easy noah's very smart because of that he knows what he's doing it's a smart model for him not for you i would say but very smart for him i i agree so we are actually very close to becoming profitable right now and um obviously our complete focus right now is to use that funding to scale to a level that will keep us within a comfortable zone yeah what and and so if you're doing about six grand a month you're saying you know what to get to seven or eight you'll be able to you know be profitable paying you your developer any tools you pay for things like that very comfortably yes yeah that's great very good okay let's wrap up here with the famous five number one what's your favorite business book um i have not read any okay that's right number two is there a ceo you're following or studying right now um richard brunson number three uh three what billing tool do you use um stripe number four how many hours of sleep you get every night [Music] five okay am i in the middle of your sleep schedule right now uh nearly what time what time is it 10 o'clock okay number five uh oh sorry what's your situation married single kids uh single okay no kids no kids and how old are you 25 25 last question what do you wish your 20 year old self knew um to move from dubai earlier than i did move a move away from dubai earlier guys there you have it move away from dubai earlier coming from leo now in london launching pluto helping freelancers built it to solve his own problem now serving about 600 customers paying 10 bucks a month so six grand a month in revenue use betalis and appsumo to get his initial funding and kind of dollars coming in the door now focusing on making real true recurring sas revenue from customers willing to pay every month to support him as he adds value and works towards moving to to break even and profitable here shortly bootstrapped company two people in london and lithuania five percent logo term per month leo thanks for taking us to the top thank you very much