Prezly Revenue & Valuation (2022)

hello everyone my guest today is yes Neil Nelson he's the CEO and founder of a company called pres Lee he's been building stuff since he was very young and had one real job where he was hired as an assistant built their website their internet and their parent company he then started a web firm grew to ten people started his startup which never really took off called Trackman people calm then moved to a large agency where he grew it from five to 80 people in charge of sales and then moved to Pressley about three years ago and has not looked back yes are you ready to take us to the top yeah thanks man thanks for pronouncing my name correct hey you bet now is Presley your baby you created it or you join the founders I joined them like two months in or something but I kind of like redid all of the all of the work so like I consider myself as a founder so do you have equity yeah sure yeah we're just two two partners right now and we share 5050 you have 50/50 it's like a little less but okay close to that so you have what 45 a little less yeah it's like 43 okay tell me what the company does how do you make money yeah so well like Presley we try to help brands in connecting their content with with stakeholders or influence around them so like an easy way to put this is like clients like IKEA or something like they use Presley to get their content to the right people at the right time you know like they have to deal with I mean like maybe employees journalists partners clients and so connecting their content with the right stakeholder it's like what the platform helps you to do and so like to put it in more like to compare it to something else it's kind of like a combination of a CRM CRM built for PR MailChimp and maybe like a mini WordPress all combined in one one package you know okay and when did you launch the company oh well like official lounge was like 2010 or something but the first years were just like it was like a hobby project you know like people like didn't take it seriously so I consider like 2014 as our real first year where we started charging clients yeah okay so you started charging in 2014 and on average what do you know what our customers paying today by oh yeah well so our average like our poor something like is around 400 per license so it's not like per user so I like to use our BL or something here just to make sure that's not like a user metric that's $400 per month or per year per month yeah so that's like 5k a year yeah and have you guys bootstrap the company or have you raised yes bootstrap I love that and what do you add now in terms of total customers we don't like to share the exact like our exact revenue but it's like in the hundreds okay like you couldn't count like more than hundred less than one thousand okay got it got it can we put a little narrower gap can we say between 100 and 300 is that fair well it's more than four three hundredths okay well we'll say between three hundred and a thousand that's good yes so so at a minimum if I take three hundred times four hundred bucks a month I mean you're doing at a minimum 120 grand a month in revenue yeah absolutely got it and what are the I mean some of the other economics around this kind of company obviously churn is critical what you guys have now in terms of churn yes so local churn is a little higher than revenue turn that's because like ours our plans are like moving upstream a little bit getting more expensive like more targeting bigger clients so our logo churn is around like 1.2 percent monthly yeah and so our revenue churn is below 1 percent so it's like zero point nine four or something so that's pretty good I think and what what's driving that churn down is are there specific parts in the product where once people use that part of the product they get really sticky yeah that's a tough question to answer and things are like we're working on really hard right now to nail that because you know like we are kind of like we have different value offerings like some people use our crm mostly like purely the crm side and then like mainly older clients came in for the newsroom's the the real like promise or USP I guess is the combination of both but to nail that metric exactly like Facebook with the 12 friends or whatever it is we we're not there yet because it's like different per segment you know so but it can be something like number of newsrooms published or right now on the CRM side is mostly like after they import a big list of contacts and they start using it so like I would say importing right now it's really important God and just so I want my audience to make sure they understand a product completely if a company is listening right now and you're trying to like in the in the past maybe you put out a press release instead take that press release upload it to Presley and you'll basically put that release in the hands of a bunch of influencers who will then spread the release versus like a PR web is that generally accurate yeah no it's not it's not like I would say I would describe that as like an old way of doing things like creating a press release oh honey so how do you do it that's what I'm trying to figure out I don't understand so we want brands to tell their stories themselves so we give them awesome news rooms that are like social friendly mobile friendly responsive all the things what is that keynote the way I don't get newsroom yeah a newsroom is like a I guess like a website like a news hub where they post all their so you could say like maybe like a best way to put it was it would be like a mini WordPress site or a medium medium posting or something like where they can publish all their news right it's a CMS okay and there's so many CMS is out there babe so that's like that doesn't make us unique but what makes us unique is that we link that CMS with with outreach and CRM tools so you can be like all right so I'm Emirates right we work for Emirates and so they publish like first-class entertainment a story or press release about first-class entertainment they first push it to their website which is like integrated in their main website but then also like from Presley they can orchestrate like tomorrow morning I want this to go out to journalists tomorrow afternoon I want to like send this person on pitch to this high-profile blogger and the day after I want to send it to all our pilots or all our stuff why do people use you versus just putting the thing on their own blog and then emailing all their press contacts yeah great question so like I think there's there's a number of reasons but one of the reasons is that if you want to do this PR machine really well you need to link up a lot of different solutions it's not just like publishing it on the website but it's also like doing personal outreach following up with the journalists doing like mass emails to like lower to your journalists so it's like all the the work that comes in and there's a lot of tools that can help you with that but as a PR professional you kind of like have to get those tools to work together and that's why they use Presley like you're always in one lines yeah all in one that's it okay what are you spending to acquire customers like there's a big difference in in customer like fully weighted customer acquisition so like I would say right now it's around 7 and 8 K 4 that way that there's yeah fully weighted so including salaries I like but there's there's a really big difference in like self-service flying and enterprise clients which are our most important segments yeah but on average 7 grand yeah 707 on average yeah and if they're paying 400 bucks a month I mean you can do the math and assume you're getting paid back around 12 13 14 months something like that yeah but I feel personally that that's not because we are profitable and bootstrap like that's not good enough for us so if you look at our newer subscriptions the new clients we sign on right now our pay buck would be around like four six months because yeah that that ARPU is kind of like over all our clients and the newer subscriptions are way up there so they're liar yeah 10k if you think a year yeah so this is obviously back at a napkin but what do you assume one of these new customers coming and is worth to you over their lifetime yeah well if we think the traditional like formula I think it's it's around like if we use revenue churn it's around like 30 to 40 K I feel like in the newer subscription or like that's what the metrics tell us that it's about 50 50 K so I would like if I have to put the number right now it would be 55 or something yeah yeah and and and you're just looking at the increased prices of the new folks coming on I mean even though I mean even not though like you said you had one point two percent a revenue churn right so if I divide one divided by you know no it's like zero 0.9 on revenue sure and 1.2 on local churn and I use revenue churn as LTV driver I don't know that's using I think that's fine I'm just trying to I want to make sure understand the number so 0.09 so 1 divided by 0.009 would basically say someone would stay with you for about 90 or 100 a hundred months yeah a hundred months basically at a four hundred hour price point right how do I mean many people would go well Nathan you're just putting immersion into excel sheet that's not realistic someone's not gonna he doesn't know if someone gonna stay with him for you know yes you know nine eight years so how do you make sure you don't get like lost in the clouds with those numbers yeah yeah so like I tried LTV because it's like you put it right I mean like you don't know if someone's staying for ninety nine months that's like a really long long time but also it's like the four hundred is like across our client base so I would say right now our average climb is paying us like around 10k a year so that's like more to 800 or 900 per month and if you do that like if you consider people to stay around for three years or four years well then you have like around 50k but again LTV I'm more focusing on like the payback ratio and like the Machine being healthy driving down churn becoming like net positive like that negative churn are you net negative yes no not yet no so it's like zero point nine nine and a bit but yeah we're getting there do you think you heard it this year yes absolutely what's your team size today so around fifteen sixteen people where are you based we're based like we're a hundred percent remote company but our main office is in Belgium Brussels okay good and give me a sense of kind of first of all of that your bootstrapped and growing this thing I'd love to understand more about the growth rate so if you look back to the end of 2016 do you remember what you were doing at the end of 2016 in terms of run rate yeah so like I have some some metrics for you select 16 we didn't like really publish that yet but like 2013 was like 15k so like the first year I know you asked questions like that 15 15 K for the whole year or per month ya know for the whole year altogether okay I have so like bookings and so the next year 2014 150 K so that's like times 10 but that's easy on the low numbers the year after that we did 400 K yeah and I think end of 2016 were on like nine hundred K eight hundred nine hundred K yeah in terms of arr yeah arr and so we're looking to double or more than double every year so let me ask did you break the two million dollar mark in 2017 well I said no you said you said eight hundred and twenty sixteen yes so we should have been at like 11.6 for two percent yes we hit that on you did so you beat one point six yes that's good so doubling your I mean look doubling year over years obviously really healthy place to be so let me see here last set of questions here yes before we wrap up if someone comes to you and offers you I mean let's say it's for X ARR do you sell the company no absolutely not we're not done yet the look in your face scares me when you say that so I believe you I believe you have much more damage to do all right yes let's wrap up here with the famous five number one what's your favorite business book let's say rework yeah but it's a good one number two is there a CEO you're following or studying right now I tried to follow a few but like I'm really intrigued by this trainer like intercom it's close to our our space and it's really interesting sorry who is the CEO this trainer yep number three but what's your favorite online tool besides intercom if I had the big one I would say air table yep number four how many hours of sleep to get every night six it's good and what's your situation married single you have kids chickens no matter yes Wow three kids okay not married but I guess in a relationship or no yes absolutely okay and how old are you I'm 37 all right yes last question take us back 17 years what he was your 20 year old self knew oh I would say like everything's going to be all right I think that's the more really important one for back then there you guys have it from yes everything's gonna be okay he launched Prezi which is PR software for corporate communications teams back in well really really 2012 ish but it got they got serious in 2014 when they started actually selling the thing they now have a team of 15 people totally remote over 300 paying customers paying about call it six seven eight hundred nine hundred bucks a month doing somewhere around you know 200 ish per month right now but economics are really healthy 1.2% logo churn and well and point nine percent revenue churn a net revenue turn monthly kak is about seven grand he's really focused on getting payback and holding it right around six months which he is doing with the new folks coming on growing healthy right so back a year ago 2016 finish at about a nine hundred thousand dollar annual recurring run rate 2017 ended somewhere north of 1.6 so healthy growth yes thank you for taking us to the top thank you