How Pricimetrics Is Building a QuickBooks for Pricing with a 10-Person Team (Interview with CEO Mike Kimel)

Introduction and Company Overview

Nathan Latka

00:00Pricimetrics. He's been a consultant in the pricing space for a long time. He's now building technology to help brands, SKUs, the corner grocery shop with over 250 SKUs, optimize pricing real time to quickly understand pricing profitability, margins with a click of a button. Taking what he knows from consulting in his head and putting it in software space. He's got 10 folks on the team today, one of which is their coder who's actually being paid.

00:19The founders have put in a 100 k to build the MVP, and three folks on that 10 person sales team working for equity are looking to land their first sale here in the next couple of months. Hey, folks. My guest today is Mike Kimel. He spent almost thirty years in analytics and pricing since obtaining a PhD in economics from UCLA. He's made a lot of money for a number of companies and decided it was time for

00:37him to make a world class pricing accessible to companies of all sizes. That's why he launched pricimetrics — with an i in the middle — .com. Mike, you ready to take us to the top?

Mike Kimel's Background in Analytics and Pricing

Mike Kimel

00:46>> Yes. Yes. I am. Thank you.

Nathan Latka

00:48Alright. So what give me a story. You said you've made a lot of money for a lot of other companies. Who are you making rich?

Mike Kimel

00:54>> Well, I've worked for a lot of Fortune 500 companies and multinational corporations, both as a consultant and as an employee. So over time, I I started out as kind of lowly minion in analytics and grew to run the pricing department for several large companies.

Nathan Latka

01:14Interesting. So tell me how pricimetrics works. You did share a pretty show your pre revenue today. How are you, what's guiding how you build the software? Is it your own use case? Do you have some free users? How are you building MVP?

How Pricimetrics Works and MVP Status

Mike Kimel

01:27>> Well, we actually have built our MVP. To a large extent, this is the product that I always felt I needed when I was running pricing departments. Basically, what we do, what our software does is it finds the profit maximizing price for all of a company's SKUs. It also does a number of other things that are useful. For instance, it can tell you which products, which of your SKUs and which locations are responding well to being an

01:55>> ad, which of them respond well to being in circular for companies that produce circulars, that kind of thing. So it basically identifies information about different products, how much you should charge for them. And it tells you what the It provides you with that information and it provides you with other information that allows you to run simulations, determine whether you're going to accept the guidance provided by the software or not. You can always override the company's the

02:26>> software's guidance. And if you accept it, you know, in general, we will raise your profitability.

Nathan Latka

02:35And Mike, what year did you launch or write the first line of code for the platform?

Company Origins and Founding Story

Mike Kimel

02:40>> Well, originally the company was going to be basically just a vehicle for me to do more consulting. So that was 2019, but it really, it kind of grew about a year and a half ago or so, people started people from my past life started joining the company because they liked the idea.

Nathan Latka

03:02Like joining full time as employees?

Mike Kimel

03:05>> Joining part time. Everybody but me currently is part time.

Nathan Latka

03:09And how many are part time today?

Mike Kimel

03:11>> We have 10 people in the company right now.

Nathan Latka

03:14And how do you pay them if you're pre revenue?

Team Structure and Bootstrapping

Mike Kimel

03:17>> That is an excellent question. We have one person getting paid right now and that's our head coder. We we basically are bootstrapping right now, although we are looking to raise money. The rest of the team is working on equity. As I said, everybody kind of joined. This started out as a one person operation and people liked what they heard. They liked the idea of what we're planning to do, what we are doing and how. And so

03:50>> little by little, people started joining. Next thing I knew, I had a company, sort of an accidental thing.

Nathan Latka

03:55Mike, one of the things I look for obviously in any early stage founder, you've gotta be able to convince world class talent to join you. Right? You've gotta be very convincing. And so why do they believe you? Why do they believe the equity they're working for right now is going to be worth anything?

Why Team Members Trust the Equity

Mike Kimel

04:09>> Well, everybody in the company just about with two exceptions are people who've known me for a long time. So in each of the cases, these are people some of them I've worked with. Most of these people, if I wanted to rip them off at some point, presumably I would have done it a long time ago. They know me, I know there's a trust factor.

Nathan Latka

04:35Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:58your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get

05:23a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not

05:45built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going

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06:32wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview.

07:00I mean, they can trust you though, but still not know what the vision's gonna be. There's a lot of people that trust the founders they work with, but they don't know if the equity is gonna be worth anything.

Mike Kimel

07:09>> That that's a good point. Basically, what we do have well, I'm not the only person with a background in analytics in the team. Additionally,

07:20>> so the others,

07:24>> they've had the opportunity to see what I can do with analytics. They've seen, they've had the opportunity to see what other people on the team can also do with their analytics skills. So it kind of between the skill set, knowing that the skill set is there, knowing that the others on the team have the ability to do X, Y and Z and knowing what the software is intended to do, it just sounded compelling to a number

07:56>> of people.

Nathan Latka

07:57You could have the best code on earth with the smartest PhDs, but if you can't sell, there's no business and the equity is worth nothing. Do you tell a story that makes them understand that, hey, you can sell. Mike can sell a million dollars worth of this product.

Building a Sales Team After Realizing He Couldn't Sell

Mike Kimel

08:09>> Well, actually that's a funny little story. I began by trying to sell the product myself. Turns out Mike can't sell. Mike can sell the vision to people who he knows and who he gets introduced to. Guess I'm speaking in third person now. But basically, among the people who have joined the company are three individuals. We have a three person sales team. So one of the guys who joined the company was VP of sales at a company

08:46>> that I worked for in the past. He recently retired from his day job and he he's decided to join us. We also have an experienced SaaS sales another gentleman who most of his background is in finance.

Nathan Latka

09:02Well, Mike, what are the salespeople doing today? Because you're you're pre revenue. Right? So how close are they to landing the first customer?

First Customer Meeting and Pilot Project

Mike Kimel

09:09>> That's a great question. And until we go through this process, I really will not know. However, we had our first customer meeting last week that resulted in the customer basically seeing a demo of the product, liking what they saw and sending us some data so that we could begin a pilot project with them.

Nathan Latka

09:33And you mentioned SKUs and pricing optimization. I'm looking at the website and looking at some of the screenshots you have here. Is this really the best fit for folks with like a thousand SKUs, big e commerce brands?

Mike Kimel

09:44>> Well, I mean, a thousand SKUs or 250,000 SKUs. The software really doesn't care. It's a distillation of what I've been doing for thirty years plus what some of the other members of the team have been doing for.

Nathan Latka

09:58My my point though is, Mike, is if there's someone listening right now that has an Etsy shop with three SKUs, they're not gonna get value from your tool. What's the minimum amount of SKUs someone would need to get value from your tool?

Target Customer Profile and Minimum SKU Threshold

Mike Kimel

10:09>> That's a great question. My guess is that probably if you've got less than 50 SKUs or so or you do very little in the way of transactions, you probably don't need the the product. But one of the things that we are aiming for, we have entered into a field where there there is competition. There are some established companies out there. There are companies that have been around for thirty years

Nathan Latka

10:38Like who?

Mike Kimel

10:39>> Software. Pros. Pros has been

10:41>> around for, I don't know, since the eighties, I believe. And they're they're on the Nasdaq. I think last I checked, their market cap is about 1,500,000,000. So we're up against some established competitors. But what is different about us, aside from the fact that we think we do pricing better and we have reason to believe we do pricing better, it's not just we think, but we also have this vision where we're going to democratize this. You cannot

11:13>> get pricing software at less than, call it, I got $150,000 $200,000 a year for an annual site license. We are shooting for something a little bit different. We want to be able to service the corner grocery store. This is software.

Competitive Landscape and Pricing Vision

Mike Kimel

11:36>> I've been in companies that have used a number of our competitors and I've actually been a user myself. I understand what they do, I understand the limitations of what they do and I understand how to make this accessible. So we have made software that is accessible to much, much smaller companies. There's an entire range of companies out there that could never afford a $250,000 a year site license. We are going to be providing the same

Nathan Latka

12:09Understood.

Mike Kimel

12:10>> Service at smaller companies.

Nathan Latka

12:11That makes a lot of sense. But but over, you know, 100 SKUs, two fifty SKUs, something around that is where this gets valuable. Now I guess the question I have for you is you've got one person that you're actually paying, nine are working for equity. Are you still doing the consulting? Is the consulting business still a thing?

Mike Kimel

12:26>> No. Our goal was not to be a consulting firm.

Nathan Latka

12:31Why shut it off though? I mean, of the most successful SaaS companies start off as consulting. They do 1,000,000 in consulting, 2,000,000 in consulting until they can get the software built and then they start selling the SaaS.

Mike Kimel

12:41>> I understand that. I didn't say we won't do consulting. I said our goal is not consulting firm, however. Our goal, when we look at it, our goal is to be something like a QuickBooks for pricing. QuickBooks sort of created an industry out there. Before that, everybody thought you need a bookkeeper, you need a person. And possibly even if you're complicated enough, you need to go to Arthur Andersen or Ernst and Young or whoever. Right now, if

QuickBooks for Pricing: The Product Vision

Mike Kimel

13:12>> you need you can tell the the bike shop around the corner, look, you need pricing help. And they'll say, yeah, but if I do, who am I gonna go to? McKinsey? I mean, you know, they can't afford it. We want to make this sort of service accessible to companies of all sizes.

Nathan Latka

13:30I understand the product vision very clearly. I'm just trying to understand how you're going to get there. Right? So I guess Got it. The consulting that you were doing, did you own that consulting company?

Mike Kimel

13:40>> Yes. I did some consulting. Yes.

Nathan Latka

13:43But I guess why shut that I mean, if you truly understand the customer's problem, shouldn't your consulting business be growing, not you shutting it off?

Mike Kimel

13:54>> You may be right. I may not be necessarily going about this the right way. Sometimes

Nathan Latka

14:01There's no right or wrong way. I'm just trying to get in your head.

Consulting Background and Why He Shifted to Software

Mike Kimel

14:05>> Long story short, it comes down to something that we discussed about four or five minutes ago, which is that I'm not the world's greatest sales guy. When I was focused on consulting, basically I had the same customers in year one that I had The customers that I had in year one, still had in year eight.

Nathan Latka

14:28Got it.

Mike Kimel

14:29>> What I am not good at is expanding business.

14:34>> So basically, we have a sales team and I want them to focus more on selling the product rather than selling something that is

14:44>> not

Nathan Latka

14:45That makes sense. That makes sense, Mike. And you're bootstrapped today. Correct? Yes or no?

Mike Kimel

14:49>> I'd say yes. The reason I I put the I'd say in there is that there has been some money put in the company by another member of the team. So but since he's part of the team, I would say that counts as bootstrapping as well.

Nathan Latka

15:04I would agree with that. Very cool. And how much have you guys all put in together so far?

Mike Kimel

15:09>> I think about a 100 k, give or take.

Nathan Latka

15:12Does that make you nervous?

Mike Kimel

15:14>> Well, I will be a lot more comfortable once we start bringing in our first few customers.

Nathan Latka

15:21On that note, we're out of time. Let's wrap up, Mike, with the famous five. Number one, what's your favorite book?

Mike Kimel

15:27>> You know, The Dogs of War. I've always liked that.

Nathan Latka

15:30Number two, is there a CEO you're following or studying?

15:34>> No.

15:34Number three, what's your favorite online tool for building pricimetrics?

Mike Kimel

15:40>> Well, we use React for the front end, so probably that.

15:45>> Okay.

Nathan Latka

15:46Number four, how many hours of sleep do you get every night?

Mike Kimel

15:51>> Now I get a lot more than I used to. For a while, this

15:56>> was a hectic job and it took a lot of time while we were knee deepened. Now I'm becoming far more redundant than I used to be and there's time for for me to sleep.

Nathan Latka

16:12So, Mike, how many hours of sleep do you get?

Mike Kimel

16:15>> I would say I'm up to about seven.

Nathan Latka

16:17And what's your situation? Married? Single? Kids?

Mike Kimel

16:21>> I am married, and I have a 12 year old kid.

Nathan Latka

16:25Very cool. And how old are you?

Mike Kimel

16:28>> That's I'm kind of old for an entrepreneur. I am 53.

Nathan Latka

16:33Alright. Last question. Something you wish you knew when you were 20.

Mike Kimel

16:38>> You know, started companies other than consulting, I never really stuck with them. And I probably had I known, I would have stuck with a few of them for somewhat longer and made them work.

Nathan Latka

16:56Guys, there we have a pricimetrics. He's been a consultant in the pricing phase for a long time. He's now building technology to help brands skews the corner grocery shop with over two fifty skews, optimize pricing real time to quickly understand pricing profitability margins with a click of a button. Taking what he knows from consulting in his head and putting it out in software space. He's got 10 folks on the team today, one of which is their

17:15coder who's actually being paid. The founders have put in a 100 k to build the MVP, and three folks on that 10 person sales team working for equity are looking to land their first sale here in the next couple of months. We'll see what happens. Mike, thanks for taking us to the top.

Mike Kimel

17:27>> Thank you. Much appreciated.

Nathan Latka

17:29One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live, and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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