How Power-Ecard CEO Timm Dollinger grew Power-Ecard to $126K revenue and 35 customers in 2019.

hello everyone my guest today is tim dahlinger he co-founded his first web design agency in the mid 90s and built software products in the content and document management space he left the company in 2005 to start re-seeing a digital marketing agency and developed the first version of power ecard as an individual software project for a client in 2012. he then launched the company power ecard as a software company independent from racing in the beginning of 2018. tim you ready to take us to the top yes absolutely let's do it so what is power ecard doing and what's your guys's revenue model how do you make money um yes power ecot is an as software as a service product we are targeting enterprise customers and basically it enables all employees in the company to send digital greeting cards like christmas cards seasons greetings invitations and so on to their personal contacts always with individual texts signatures profile pictures and so on and all the cards are based on a centralized design templates that is normally managed by the marketing department so it's very easy to use very secure it saves a lot of time and of course it's sustainable many customers want to change from printed cards to e-cards i didn't realize there was a market for this that people were actually willing to pay for this kind of solution yes that's the question that um everybody asked me yes and maybe this was the reason why i took some time before we launched the company because we didn't realize in the first place we thought okay maybe one or two or three customers are interested but um then we realized there are more customers and then we started trying out the market and when we built the first landing page for the product very simple very basic uh in in the following week we had three or four big leads of big customers how did they find you was it an seo play on that landing page or what yeah absolutely seo the search term is basically a christmas uh christmas card christmas greeting card but always um in long tail with for business for enterprise customers b2b and so on interesting uh okay interesting so you launched that landing page and what year was that um yeah basically we launched the first development was in 2012 but um the first landing page was in 2015-16 around that time and we um we had a few customers and um then we grew a little bit and then we decided to um start it started as a separate company basically so so just to be clear first line of code is written in 2012 when was the first dollar of revenue uh 2015 2015-16 for the first real license and before when we wrote the first code it was basically an individual custom development for some customers so how much service business yeah i know it makes a lot of sense how much did you guys spend on the mvp before 2015 2016 your first dollar revenue um we we spend about let's say 50 000 and um but it was basically supported by the first customers yeah that we developed it for and how many have you scaled since that first christmas card landing page how many customers are you serving now today uh today we have about 120 customers and it's decided in one-time use and frequent use so we're really trying of course to to get the customers in a model that has frequent use not only christmas cards but also invitational how many are actually paying on a monthly basis uh about um 35 customers on a yearly basis it's on a yearly basis okay so you have no monthly plans it's yearly only uh yearly only or the one-time use okay 30. okay so 35 on yearly and then another about 90 on i have paid one for one-time use yes yes okay correct and just talking about the yearly plans tell me how you price what's the average price point um the price point for yearly plans starts at about 1000 euros and then it scales up we have also larger licenses for larger customers it depends how many cards you want to send and how many users you want to use it with this what do you think what do you think of fair averages though is it a thousand or two thousand or five the average last year was about um 1500 euro per year so we have some larger customers and some smaller of course of course yeah so i mean can i take 1500 right an average annually times at 35 i mean that's like 50 000 essentially an annual sales right there uh yes that's annual and the rest is is one time so how do you how do you well i guess let me ask you first about your team what's the team size look like today yeah the team size is very small we have uh about three people uh two developers and halftime online marketing and halftime support and of course some time from me but um for us it's um we can um we can use services from our sister company from the agency so if we have uh resources over there um we can we can scale um and and and shift from the uh um do you own the agency yes yes okay so you don't have to like beg them for resources you can say i want to give this thing resources absolutely yes that's right so you own 100 of power ecard and your full owner of the agency yes me and my business partner so everybo we have 100 percent 15 for for me and for him okay so you guys have bootstrapped the company using revenues from the service industry absolutely that's correct yes interesting okay so how do you plan i mean one of the tricky things with this kind of business is it's difficult to plan what your future revenue is going to look like so it's hard to make hiring plans because you have you don't have a it's not really sticky it's either one time or a couple people do annual how do you make this thing more sticky yeah that's really difficult and very good questions a question and we yes we want to upsell from the one-time customers to the of course to the to the yearly revenue so we are building features that you can use for other types of cars and invitations that's one thing and then we have to scale of course um overall so we we are trying or we are we are trying to get about three to four hundred customers this year and really spending more on marketing and spending more on development but but still staying bootstrapped so we are we are not financed externally so we have to really be um very very sensitive how we spend the money yeah so when you add up uh all across 120 customers last year total revenue last year was about how much about 140 150 000 euros and do you think you'll do that this year absolutely yes i think we will maybe double it this year double or triple okay and you're on track to do that like how much have you done today this year um yeah it's it's uh difficult to date not too much to be honest because um now in the coming in the months before christmas it really really uh has a as a spike in the in the revenue and also because um the customers are on the yearly fee but maybe only start in february or may or august so it's really difficult but but client-wise so the leads and the contacts and the clients that also already um license the system it's looking very promising okay when you look at what you've done today i understand you're seasonal i mean how little are you talking about today this year uh this year the revenue is maybe only about uh let's say in licenses it's about 50 000 euro okay so you think you'll do like 250 000 ish in the second half of the year absolutely absolutely on the last year uh it's it's uh basically it wasn't last year's the same yes interesting so you okay so you're on you you feel like based off patterns you know that you did 120 130 grand last year this year you've done 50k so far and think you'll do 300 grand by the end of the year absolutely that's right and i'm seeing all the statistics seeing the leads seeing the the talks that we have it cost with customers and so on yeah definitely we're really seeing the traction right now interesting okay um any plans to raise capital or no uh actually we want to stay bootstrapped so we had a lot of success with our agency i know software business is another business but if we can we want to stay bootstrapped maybe a little bit slower but um yeah it also has advantages is the power ecard business burning capital that the agency is kind of making up for every month um in the last year yes a little bit um but uh we will break even this year definitely okay so when you say a little bit over the past year you're talking like 10 negative 10 ebitda or like how cash flow negative um you mean only the power card business just power request um yeah maybe um we let's say it's difficult um and maybe we lost about overall um 50 000 euro okay and then you just again you make that up with the service business yes it definitely definitely yeah yeah i guess the reason i always ask is anyone balancing a sas company with an agency you're always stuck in this problem where the agency is a cash cow but the sas company has better economics if you can get it to scale properly so you're constantly deciding how you're going to allocate resources between the software side and the agency side yes absolutely that's true and this is difficult and i think you have to decide what you want to do and i think now we we know that this business can scale it works we have very very good client base good feedback so i think we are going all in this year very good all right let's wrap up here with the famous actually before we wrap up with the famous five...