How Prezly Bootstrapped to 1.6M ARR With 300+ Customers (Interview with Co-Founder Gijs Nelissen)

Introduction and Background

Nathan Latka

00:00Hello, everyone. My guest today is Gijs Nelissen. He's the CEO and founder of a company called Prezly. 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 intranet, and their parent company. He then started a web firm, grew to 10 people, started his startup, which never really took off called trackmypeople.com, then moved to a large agency where he grew it from

00:22five to 80 people in charge of sales, and then moved to Prezly about three years ago and has not looked back. Gijs, are you ready to take us to the top?

Gijs Nelissen

00:30Yeah. Thanks, man. Thanks for pronouncing my name correct.

Founding Story and Equity Split

Nathan Latka

00:33You bet. Now is Prezly your baby? You created it, or you joined the founders?

Gijs Nelissen

00:38I joined them, like, two months in or something, but I kinda, like, redid all of the all of the work. So, like, I consider myself as a founder.

Nathan Latka

00:46So do do you have equity?

Gijs Nelissen

00:48Yeah. Sure. Like... Yeah. We're just two two partners right now, and we share

Nathan Latka

00:48Fifty fifty?

Gijs Nelissen

00:48Almost. Yeah. Fifty fifty. It's, like, a little less, but

Nathan Latka

00:48Okay.

Gijs Nelissen

00:48Close to that.

Nathan Latka

00:56So you have, what, 45, a little less?

Gijs Nelissen

00:59Yeah. It's like 43.

What Prezly Does and How It Makes Money

Nathan Latka

01:00Okay. Tell me what the company does. How do you make money?

Gijs Nelissen

01:03Yeah. So, well, like Prezly, we try to help brands in connecting their content with stakeholders or influence around them. So an easy way to put this is clients like IKEA or something, they use Prezly to get their content to the right people at the right time. They have to deal with

01:24maybe employees, journalists, partners, clients. And so connecting their content with the right stakeholder is 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 package, you know.

Launch Year and When Charging Began

Nathan Latka

01:48Okay. And when did you launch the company?

Gijs Nelissen

01:51Oh, like official launch was 2010 or something, but the first years were just like... It was like a hobby project. People didn't take it seriously. So I consider 2014 as our real first year where we started charging clients. Yeah.

ARPU and Pricing Model

Nathan Latka

02:08Okay. So you started charging in 2014. And on average, what do you... What, you know, what are customers paying today?

Gijs Nelissen

02:14By now, yeah. Well... So our average, like, ARPU or something like is around 400 per license, so that's not per user. So I like to use RPL or something here just to make sure that's not a user metric.

Nathan Latka

02:29But that's $400 per month or per year?

Gijs Nelissen

02:32Per month. Yeah. So that's like 5 k a year. Yeah.

Bootstrapped Growth and Customer Count

Nathan Latka

02:35And have you guys bootstrapped the company or have you raised?

Gijs Nelissen

02:38Yes. Boot... Bootstrapped.

Nathan Latka

02:39I love that. And what are you at now in terms of total customers?

Gijs Nelissen

02:43We don't like to share the exact... Like, our exact revenue, but it's like in the hundreds.

Nathan Latka

02:43Okay.

Gijs Nelissen

02:43So, like, you could... Can count, like, more than 100, less than 1,000.

Nathan Latka

02:52Okay. Got it. Got it. Can we put a little narrower gap? Can we say between a hundred and three hundred? Is that fair?

Gijs Nelissen

02:57Well, it's more than four... 300.

Nathan Latka

02:57Okay. Got it.

Gijs Nelissen

02:57All I can I can say?

Nathan Latka

03:01Well, then we'll... That's helpful. We'll say between 300 and a thousand. That's good. Yes. So at a minimum, if I take 300 times $400 a month, I mean, you're doing at a minimum $120,000 a month in revenue.

Churn Metrics and Product Stickiness

Gijs Nelissen

03:11Yeah, absolutely.

Nathan Latka

03:11Got it. And what are the... I mean, some of the other economics around this kind of company, obviously, is critical. What are guys at now in terms of churn?

Gijs Nelissen

03:19Yeah. So logo churn is a little higher than revenue churn. That's because our plans are moving upstream a little bit, getting more expensive, like more targeting bigger clients. So our logo churn is around, like, 1.2 Monthly. Percent. Monthly. Yeah. And so our revenue churn is below 1%. So it's, like, 0.94 or something. So that's pretty good, I think.

Nathan Latka

03:44And what what's driving that churn down? Are there specific parts in the product where once people use that part of the product, they get really sticky?

Gijs Nelissen

03:53Yeah, that's a tough question to answer and things that we're working on really hard right now to nail that because

04:01have different value offerings. Some people use our CRM mostly, purely the CRM side, and then mainly older clients came in for the newsrooms. The real 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're not there yet because it's different per segment. But it can be something like number of newsrooms published or right now on the CRM side, it's mostly

04:31like after they import a big list of contacts and they start using it. So like I would say importing right now is really important.

Nathan Latka

04:38Got it. And just so I want my audience to make sure they understand the 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 Prezly, and you'll basically put that release in the hands of a bunch of influencers who will then spread the release versus like a PRWeb. Is that generally accurate?

Gijs Nelissen

04:56Yeah. 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.

Nathan Latka

05:02Well, so how so how do you do it? That's what I'm trying to figure out. I don't understand.

Gijs Nelissen

05:05So we we want brands to tell their stories themselves. So we give them awesome newsrooms that are, like, social friendly, mobile friendly, responsive, all the things you wanna do use.

Nathan Latka

05:13Though? The way I don't get newsroom?

Gijs Nelissen

05:15Yeah. Newsroom is like a a, I guess, like a website with with... Like a news hub where they post all there. So you could say, like, maybe, like, a best way to put it was... Would be, like, a mini WordPress site or a Medium posting or something where they can publish all their news. It's a CMS. And then there are so many CMSs out there, that doesn't make us unique. But what makes us unique is that

05:39we link that CMS with outreach and CRM tools. 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 Prezly, they can orchestrate like tomorrow morning, I want this to go out to journalists. Tomorrow afternoon, I want to,

06:05like, send this personal pitch to this high profile blogger. And the day after, I wanna send it to all our pilots or all our staff.

Nathan Latka

06:12You know? People use you versus just putting the thing on their own blog and then emailing all their press contacts?

Gijs Nelissen

06:17Yeah. Great question. So I think there's a number of reasons, but one of the reasons is that if you wanna do this PR machine really well, you need to link up a lot of different solutions. It's not just publishing it on the website, but it's also doing personal outreach, following up with a journalist, doing mass emails to lower tier journalists. So it's all the work that comes in and there's a lot of tools that can help

06:42you with that. But as a PR professional, you have to get those tools to work together. And that's why they use Prezly. All those in one. All in one. That's it.

Customer Acquisition Cost

Nathan Latka

06:52Okay. What are you spending to acquire customers?

Gijs Nelissen

06:57There's a big difference in fully weighted customer acquisition. So I would say right now it's around 7 to 8 k.

Nathan Latka

07:07Fully weighted.

Gijs Nelissen

07:08Yeah, fully weighted. So including salaries and like... But

07:13there's a really big difference in, like, self-service client and enterprise clients, which are our our most important segments. Yeah.

Nathan Latka

07:19But on average, $7,000?

Gijs Nelissen

07:21Yeah. Seven on seven on average. Yeah.

Payback Period and New Subscription Economics

Nathan Latka

07:23Yeah. And if they're paying $400 a month, I mean, you can do the math and assume you're getting paid back around twelve, thirteen, fourteen months, something like that.

Gijs Nelissen

07:30Yeah. But I feel personally that that... That's not... Because we are profitable and bootstrapped, 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 payback would be around, like, four to six months because, yeah, that that ARPU is kinda like overall our clients, and the newer subscriptions are way up there. So they're like higher. Yeah. 10 k, 15 k a year. Yeah.

LTV Discussion and Revenue Churn

Nathan Latka

07:55So this is obviously back in the nap napkin, but what do you assume one of these new customers coming in is worth to you over their lifetime?

Gijs Nelissen

08:02Yeah. Well, if we take the traditional formula, I think it's around... If we use revenue churn, it's around 30 to 40 k. I feel like in the newer subscription or, like, that's what the metrics tell us that it's it's above fifth... 50 k. So I I would like... If I have to put a number right now, it would be 55 or something. Yeah.

Nathan Latka

08:21Yeah. And and and you're just looking at the increased prices of the new folks coming on. I mean, even though... I mean, even that, though, like, you said you had 1.2% revenue churn. Right? I mean, so if I divide one divided by, you know

Gijs Nelissen

08:33No. It's like zero zero point nine on revenue churn and 1.2 on logo churn. And I use revenue churn as as a LTV driver. I don't know.

Nathan Latka

08:33No. That's fine.

08:43No. I think that's fine. I'm just trying to... I wanna make sure I understand the numbers. So point o nine. So one divided by point o nine would basically say someone would stay with you for about ninety or almost 100 a hundred months. Yeah. A hundred months, basically, at a $400 price point. Right? How did... I mean, many people would go, well, Nathan, you're just putting numbers into Excel sheet. That's not realistic. Someone's not gonna... He

09:02doesn't know if someone's gonna stay with them for, you know, eight years. So how do you make sure you don't get lost in the clouds with those numbers?

Gijs Nelissen

09:10Yeah. Yeah. So I try not to overstress LTV because it's like, you put it right. I mean, you don't know if someone's staying for ninety nine months, that's a really long, long time. But also it's like the 400 is across our client base. So I would say right now our average client is paying us around 10 ks a year. So that's more to 800 or 900 per month. And if you do that, if you consider people

09:34to stay around for three years or four years, well, then you have around 50 ks. But again, LTV, I'm more focusing on the payback ratio and the machine being healthy, driving down churn, becoming net positive, net negative churn.

Nathan Latka

09:50Are you net negative yet? Yes.

Gijs Nelissen

09:52No, not yet. No. So it's like 0.99 and a bit, but yeah, we're getting there.

Nathan Latka

09:57You think you'll hit it this year?

Gijs Nelissen

09:59Yes, absolutely. Yeah. We're hiring for that and yeah, absolutely.

Team Size and Remote Setup

Nathan Latka

10:02What's your team size today?

Gijs Nelissen

10:03So around 15, 16 people.

Nathan Latka

10:06Where are you based?

Gijs Nelissen

10:08We're based... Like, we're a 100% remote company, but our main office is in Belgium, Brussels.

Nathan Latka

10:15Okay. Good. And and Yeah.

Gijs Nelissen

10:16Close to Brussels. Yeah.

Historical Revenue Growth by Year

Nathan Latka

10:17And give me a sense of kinda... First off, I love that you're bootstrapped and growing this thing. I'd love to understand more about the growth rate. So if you look back to the end of twenty sixteen, do you remember what you were doing at the end of twenty sixteen in terms of run rate?

Gijs Nelissen

10:30Yeah. So I have some metrics for you. So 02/16, we didn't, like, really publish that yet, but, like, 2013 was, like, 15 k. So, like, the first year, I know you asked that question.

Nathan Latka

10:43$15 k for the whole year or per month?

Gijs Nelissen

10:45Yeah. No. For the whole year altogether.

Nathan Latka

10:48Okay.

Gijs Nelissen

10:48So like bookings. And so the next year, 2014, we did 150 k. So that's like times 10, but that's easy on the low numbers. The year after that, we did 400 k. And I think end of two thousand sixteen, we're around, like, 900 k, 800, 900 k.

Nathan Latka

11:05Yeah. In terms of ARR?

Gijs Nelissen

11:07Yeah. ARR. And so we're we're looking to double or more than double every year.

2017 ARR and Whether He Would Sell

Nathan Latka

11:11So let me ask. Did did you break the $2,000,000 mark in 2017?

Gijs Nelissen

11:16Well, I said 800. So, like, we're like

Nathan Latka

11:19No. No. No. You said you said 800 in 2016.

Gijs Nelissen

11:22Yes. So we should have been at, like, one one point six for for 22%. Yes. We hit that on.

Nathan Latka

11:27You did. So you beat 1.6. Yes. That's good. So doubling your... I mean, look. Doubling year over year is obviously a really healthy place to be. So let me see here. Last set of questions here. Gijs, before we wrap up, if someone comes to you and offers you... I mean, let's say it's four x ARR, do you sell the company?

Gijs Nelissen

11:42No. Absolutely not. We're not done yet. I mean, like, we are just getting started. Yeah.

Famous Five Rapid Fire Questions

Nathan Latka

11:47The look in your face scares me when you say that. So I believe you. I believe you have much more damage to do. Alright. Gijs, let's wrap up here with the famous five. Number one, what's your favorite business book?

Gijs Nelissen

11:57I would say Rework.

Nathan Latka

11:59Yep. That's a good one.

12:00Number two, is there a CEO you're following or studying right now?

Gijs Nelissen

12:03I tried to follow a few, but, like, I'm I'm really intrigued by Des Traynor, like, at Intercom. That's... It's close to our our space, and it's really interesting.

Nathan Latka

12:11Sorry. Who is the CEO?

Gijs Nelissen

12:12Des Traynor. Like, Intercom guy.

Nathan Latka

12:15Yep.

12:16Number three. But what's your favorite online tool besides Intercom?

Gijs Nelissen

12:20If I had to pick one, I would say Airtable.

Nathan Latka

12:24Yep.

12:25Number four. How many hours of sleep do get every night?

Gijs Nelissen

12:27Six.

Nathan Latka

12:28Yeah. It's good. And what's your situation? Married, single, you have kids?

Gijs Nelissen

12:32Three kids. Not married yet.

Nathan Latka

12:33Wow. Three kids. Okay. Not married, but I guess in a relationship or no?

Gijs Nelissen

12:37Yes. Absolutely. Yeah.

Nathan Latka

12:38Okay. And how old are you?

Gijs Nelissen

12:40I'm 37.

Nathan Latka

12:41Alright. Gijs, last question. Take us back seventeen years. What do wish your 20 year old self knew?

Gijs Nelissen

12:46Oh, that's a tough man... One minute. I would say, like, everything's going to be alright. I think that's the more really important one for me back then.

Nathan Latka

12:55There you guys have it from Gijs. Everything's gonna be okay. He launched Prezly, which is PR software for corporate communications teams back in... Or, well, really, really twenty twelve 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, $600, $700, $800, $900 bucks a month doing somewhere around, you know, 200,000 ish per month right now.

13:18But economics are really healthy. 1.2% logo churn and... Well... And point 9% revenue churn... Net revenue churn monthly. CAC is about $7,000. 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 finished at about a $900,000 annual recurring run rate. 2017 ended somewhere north of 1.6. So healthy growth. Gijs, thank you for taking us to

13:43the top.

Gijs Nelissen

13:44Thank you.