How Prism.fm Reached 240 Customers and $9M Series A While Surviving the Live Music Shutdown (Interview with CEO Matt Ford)

Introduction and COVID Survival Story

Nathan Latka

00:00Hey, folks. My guest today is Matt Ford. He's an entrepreneur, engineer, creator, artist, spiritual being out of Austin, Texas, now building prism.fm. He helps make planning live music events easier. Matt, you ready to take us to the top?

Matt Ford

00:12>> Absolutely. Thank you.

Nathan Latka

00:13I was worried about you during COVID. There was no live music events happening. How'd you survive?

Matt Ford

00:19>> It there we actually we found the silver lining through the pandemic for sure. It's amazing to say that now in hindsight. There was definitely a moment in the heart of it where it was hard to see the other side of it. But our basic hypothesis the whole time was this was gonna be a brief moment in time. There was gonna be a live music on industry on the other side of the pandemic. And if we use

00:44>> this time extremely wisely, we can come out on the other side extremely strong. And I'm happy to say that that's what happened. We ended up emerging with twice as much revenue as we had. We closed the Series A.

Nathan Latka

00:56So you're you're over one you're over 1,200,000 then now in ARR?

Matt Ford

01:01>> Yes. Yeah.

Nathan Latka

01:02Yeah. Yeah. Oh, right around there?

Matt Ford

01:04>> We we were back then. We're much higher now. I guess yeah. When when I the pandemic, I I was actually counting was counting, like, March 2022 is basically when I wrote the pandemic off as being closed, and we've had some good growth since then as well.

Keeping the Core Product and Adding Talent Agents

Nathan Latka

01:21Yeah. That's incredible. Now did you pivot the company or you still are doing software for live managing live events?

Matt Ford

01:26>> We did not pivot the company. So most of our customers we we use it to our advantage for sure, I'll I'll I'll I'll share that. But our our core business, we we kept the same software as a service for the people putting on live music events. The the big thing that we added during the pandemic was we brought on the other side of the live music marketplace. So there is venues, promoters, and talent agents. And we

01:52>> added talent agents as a as a new business line during the pandemic. We're about six months into a beta. We have around 20 customers, and

02:05>> and the customers are loving it. We've identified a a small list of things that we need to do to really sweep that side of the market. And and we're closing in our our vision of being the ubiquitous solution for all sides of the live music marketplace. So things things are frankly really, really great. So yeah. So just to be clear,

Nathan Latka

02:24your talent agencies, the event venues, and then the talent, the bands themselves, you're working with all three?

Matt Ford

02:29>> So so the talent agencies and the bands are one group. The talent agency represents the band, and then there's the venue and the promoter. So those are the three that we're working with. And the venue

Nathan Latka

02:39make money on all three lines there?

Matt Ford

02:41>> Yes. Yeah.

Pricing Model and Enterprise Customers

Nathan Latka

02:42The same model on all of them? It's like a percent or something, or is one paying a SaaS fee? One's a percent?

Matt Ford

02:47>> We have a basic SaaS fee. We wanna move into some more transaction based things. But for the time being, we've, yeah, we're out of basic SaaS fee. We actually we just we did our pricing on the venue and the promoter side of the company. It's the most mature side of our product. So we're getting to a place where I'm I'm really pleased and happy with, our our pricing model.

Nathan Latka

03:08What are they paying per month these days?

Matt Ford

03:12>> It's all over the board. Our average comes in around 8 k a month. But we have enterprise clients that are paying $250,000 a year. And we have some legacy customers that are still paying $3,000 a year. I mean, one of the cool things that happened is when we launched Prism, we were getting beat up for a thousand dollars a year. Promoters were saying, hey. Thousand bucks a year. Let's get that down to $800 a year, $600

03:38>> a year. It was only on pure faith that I kept running the business in that moment. But now we have a customer paying us over $250,000 a year, and they're not alone. That's a paradigm shift at the company. So, I mean, it we it's not like we've won the war, but, you know, that's very, very encouraging to start to have people pay us real money for our service.

Nathan Latka

03:59Oh, 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

04:22your Stripe account, you see your valuation real time. You can see what it 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

04:47get a 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.

Matt Ford

05:00>> Right? So

Nathan Latka

05:00the 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 built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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

05:24by 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 out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than

05:50what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if you wanna 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

Moving Upmarket: The $250K Customer Story

Nathan Latka

06:14ahead 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. Very few founders make that gap. Right? Going I mean, we know it needs to happen at some point, but very few do it, much less when they're going through COVID with what you were doing. Like, how did you have the confidence to with a straight face

06:33say, no. It's 250 k per year. That's the price, and I'm not discounting it. Pay it or go somewhere else.

Matt Ford

06:39>> Yeah. It

06:42>> that's

06:45>> yeah. There's a lot packed into that question. With with that particular client, we they they launched a $100,000,000 initiative. They raised a $100,000,000 to,

06:58>> to buy music venues and to create a tremendous organization. And very early on, they got in touch with us. They understood the value of software. They've tried to build out their own systems, and they know how much it costs it cost them. So I think those were all very important factors. We didn't have to convince them of of our value. And the price has gone up multiple times on them, and it's been rooted in software needs.

07:25>> So we're to be clear, they're not we're not they're not paying us as a consultant. They're paying us fees, SaaS fees, and we've been able to get them up over time based off of, the features that we're pumping out. So, you know, if for you know, we get to a certain place where Prism's running a big chunk of their operation and they're saying, hey. There's this other bucket of our business. We're spending a lot of money

07:46>> on it. It would be really valuable for us if you could streamline it, and we and then we negotiate on the fees. So through that process, we've guided them up to $250,000 a year.

Revenue Breakdown by Customer Segment

Nathan Latka

07:55And And and, Matt, break down this for me that the revenue buckets of these three different folks you're selling to. What percent of revenue comes from which group?

Matt Ford

08:03>> By far so venues and promoters, it's a little bit hard to distinguish because they're a lot of promoters are also venue owners. So it's really just two buckets. It's promoters and venues and agents. So just and the vast majority is our our promoters and venues.

Nathan Latka

08:18Like, more than 90% of your revenue?

Matt Ford

08:19>> Yeah. Yeah.

Customer Count: 240 Venues and Promoters

Nathan Latka

08:20Oh, wow. Okay. And how many folks are paying over there? How many customers?

Matt Ford

08:23>> The agency market's six months old. So that's probably mostly why.

Nathan Latka

08:28I see. I see. How many individual venues and promoters, like, customers do you have?

Matt Ford

08:33>> Somewhere around 240.

Nathan Latka

08:35Wow. Okay. 240. Interesting. That's great.

Matt Ford

08:37>> And you said on average, they're paying, like, $2 a month?

08:41>> No. On average, it's 7 k a year ish.

Nathan Latka

08:44Yeah. 7 okay. $7k a year, $600 a month, something like that.

Matt Ford

08:48>> Yeah. Can can can I multiply that? I mean, can I take $600 a month times 240? That puts you at $150k a month in revenue.

08:56>> Yeah. That's that's the way the math works. I'll for political reasons, I won't confirm or deny that, but that that sounds, yeah, about right. Yeah.

Funding History: Bridge Note and Series A

Nathan Latka

09:04Why'd you decide your your funding history today, you raised a million in 2017, I believe. You raised 2,200,000 in 2019. Are those both accurate, and did you raise more?

Matt Ford

09:13>> The so 2019 was a bridge note that converted in 2022 on a on, like, a $9,000,000 round. Yeah.

Nathan Latka

09:23The 2,200,000 converted in in from 2019 converted in 2022?

Matt Ford

09:27>> Yes. It did. Yeah. I see. Well, sorry. August 2021. Yep.

Nathan Latka

09:32Okay. Got it. So you you did round in 2021 where you raised how much?

Matt Ford

09:36>> Yeah. You the in total, the round was 9,000,000.

Nathan Latka

09:40Including the 2,000,000 that converted in or no?

Matt Ford

09:42>> Yes. Yes.

Nathan Latka

09:43Oh, okay. So you raised 7,000,000 of new capital, 2,000,000 converted from 2019, and that's what you raised?

Matt Ford

09:49>> Yep. Yep. Yeah. It was actually closer to 6 and that two it was the the the the 2019 round was 2,900,000, and then there was interest on the note. So, yeah.

Nathan Latka

10:00I see. I see. What interest? Pretty standard, six to 8%?

Matt Ford

10:04>> We were 3.5% per year.

Nathan Latka

10:06Oh, that's some that's really good. That's great.

Matt Ford

10:09>> Good negotiator.

10:10>> It was good, and it ended up working out in our favor because we had to hold on to the cash a little bit longer than expected of the pandemic. But

Nathan Latka

10:16Yep. Yep. No. That makes a ton of sense. And, I mean, can I ask, are you comfortable sharing? Most folks in their series a are selling, you know, what, 10 to 15% of the business. Were you sort of in that range?

Matt Ford

10:25>> Yeah. Yeah.

Nathan Latka

10:26Okay. Alright. So you're, 60,000,000 post money valuation, something like that.

Matt Ford

10:31>> We were less than that.

Nathan Latka

10:33Okay. Yeah. Okay. This is really impressive because I I remember, like, when we back when we played Catan that one time, if you remember, I just remember going, man, I love this guy's energy. He's got a great product. I hope he figures out how to make money during the pandemic. So I'm glad you're you figured it out.

Matt Ford

10:47>> Well, thank you for your hopes. And, yeah, we did. And like I was saying, I I have to remind myself that we slayed that dragon because it's so easy to just keep my head down.

Nathan Latka

10:55It's so impressive.

Matt Ford

10:56>> Yeah. Thank you.

Team Size and Path to Profitability

Nathan Latka

10:57Super impressive. How many folks today are on the team full time?

Matt Ford

11:01>> We and this is one of things that I'm most excited about is we we've got a relatively lean team. I think it's 20 full time. Yeah. And we are in a place where we could mean, we could cut and be profitable right now. But with the money that we have in the bank, we have a really good shot at just at just not raising again and going to profitability if that's what we choose. So Yep. From

11:26>> a healthy place, not from a place of, like, having to do really aggressive cuts or anything like that. So we we really reinvented ourselves during the pandemic. We grew revenue a lot, but we also, set ourselves up to be a much, you know, better, more profitable company in the future as well. And it just it really has worked out in our favor. Yeah.

Nathan Latka

11:44One of the ways to capture more value for any SaaS company is to sit really close to the payment stream of your customers, help them get more payments, then take a percent fee there. Right? So you haven't moved into the percent fee model yet, but it sounds like you're thinking about it. If you do move into that, what will it look like?

Matt Ford

11:57>> Yeah. Thank you for asking. We we do yeah. Wow. Exactly. You you just called out our playbook right there for sure. We help them track their payments. We help them account for their payments. We help them invoice their payments. We're not actually facilitating it yet. So that would be a really tremendous line of revenue for us if we get into it. There's, I kind of always mess up this word, but I think the right word is

12:21>> it's low elasticity in the market, meaning they're extremely price sensitive. So,

12:30>> sometimes a band might get paid a $100,000 upfront if they're a big enough band or $500,000 And we streamlined the problem of, like, keeping track of a huge mess around payments, but not a big enough problem to get, like, a ongoing 5% fee or something like that. Our clients would just go around us, if you will. So we're trying to figure out if it boils down a few basis points, if it's just baked into their software

12:53>> subscription. And it's really just this thing that like locks, you know, locks in our ubiquity because we're also handling the payments and we get it back into fees. So it's an ongoing exploration, but, you know, frankly, it's a bit of a horizon project for us. We're fully focused on what I would say, like, completing the initial mission, and it'll never be complete. But our our eyes are set on being the ubiquitous software solution for the live

13:18>> music industry. And I think in the next six months, we're gonna see that happen.

Nathan Latka

13:23Matt, how much revenue do you send right now? If you track all the revenue going through your system today, how much what is it annually right now?

Matt Ford

13:28>> If we track if we all like, all in all the payments across

Nathan Latka

13:32Yeah. Yeah. Everything you sit on top of, all the payments you process.

Matt Ford

13:35>> In the billions. Yeah. Don't wanna give you too, specific of a number.

Nathan Latka

13:39You said millions or b? Billions?

Matt Ford

13:41>> B. Yeah. Billion.

Nathan Latka

13:42Yeah. Yeah. So so if you can figure that number out. Right? You know, 1% of a billion, obviously, that starts to get very interesting very quick.

Matt Ford

13:49>> Absolutely. Yeah. Yeah. Interesting.

Nathan Latka

13:52Okay. Very cool. Heck of a story here. Let's wrap up with the famous five. Number one, last book you read.

Matt Ford

13:58>> I'm reading Leonardo da Vinci's biography by Walter Isaacson, and it's absolutely incredible and very inspiring and very interesting.

Nathan Latka

14:07Number two, is there a CEO you're following or studying?

Matt Ford

14:11>> Thought I'd give you the same answers. Not the book, but the CEO one. Ugh. I'm still

Nathan Latka

14:19Yeah. Okay. Let me ask a different get tell me an artist that you're really impressed by because they really think like a business CEO. They're all they're not just talented artists. They're also a really good business person.

Matt Ford

14:29>> That's a good that's a good one. This is this is the one that pops to mind. I saw Grimes on a podcast recently, and I think she's super smart and interesting and a cool person. And, she kind of blew my mind.

Nathan Latka

14:40Yeah. It's happy answer, but yeah.

Matt Ford

14:42>> That works. Grimes. Even the last treatment podcast is really good.

Nathan Latka

14:46Number three, what's your favorite online tool for building Prism?

Matt Ford

14:49>> We just subscribed to Referral Rock. I'll give them a shout out. It's I wouldn't say it's my favorite yet because we're just getting it going, but it's a CRM for our referral program. And I think it's really smart. It's a great price point. It's a good tool. Yeah. I'm I'm excited that it's gonna be a valuable thing for us.

Nathan Latka

15:09Alright. Fair enough.

Matt Ford

15:10>> Referral Rock.

Nathan Latka

15:11Number four, how many hours of sleep do you get every night?

Matt Ford

15:13>> And I get a referral price for Referral Rock. So if anyone signs up There you go. From me. How many hours of sleep?

Nathan Latka

15:22Hours of sleep. Yeah.

Matt Ford

15:24>> I go for seven to eight. Sleep is extremely important to me. I'm a big believer of, of of doing the things, sleep, meditation, exercise so that when I'm not so that I'm when I'm working, I can get that time back because my energy is just really that good. So I believe that health pays dividends, and that's the model I follow.

Nathan Latka

15:42I love that about you. Number four, situation, married, single, kiddos?

Matt Ford

15:47>> One kid, single. Yeah. But I'm, you know, interested. So He's

Nathan Latka

15:54still playing the drums or what?

Matt Ford

15:56>> My kid? Yeah. I feel I feel like you showed me a picture of him doing a drum set.

16:01>> He is, he is really into drawing right now. He has submitted a bunch of ideas to Legos and Mattel for new toy ideas on really cultivating a passion of his. Both, like, engineering and drawing is what he's into right now. Yeah.

Nathan Latka

16:16Oh, I love that. Okay, Matt. And how old are you?

Matt Ford

16:18>> 33.

16:19>> 33.

Nathan Latka

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

Matt Ford

16:24>> Thank you. Oh, gosh. That's a great question. I wish would've come prepared for about

Nathan Latka

16:28Thirteen years ago.

Matt Ford

16:31>> Prioritize emotional health, like your life and success depends on it because it probably does.

Nathan Latka

16:39Guys, that's a good one. Prism.fm launched in 2017. Talk about emotional health. This guy made it through the pandemic when he was selling software to live event venues. There was no live music happening. How did he survive? Not only did he survive, he more than like tripled his revenue, right? Got over $155,000 a month in revenue. That's up from 2018 when I had him on. Was doing 15,000 a month in revenue. Now working with over two

17:00forty customers. His customers are mainly, again, these event venues and promoters. 90% of his revenue is there right now. His biggest customers pay over $250,000 per year. He's thinking about, can I get in the transaction business model as well? We sit on billions of dollars of transaction volume that these artists are getting paid and the venues are paying them and promoters are making, and he's actively thinking about that. So we'll see what happens. Prism.fm. Matt,

17:20thanks for taking us to the top.

Matt Ford

17:21>> Thank you so much. Appreciate it.

Nathan Latka

17:24One 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

17:50Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

18:12fundraise, a big sale, a big profitability statement or else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

18:34for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, I do it so that we can all learn. We have to counter those people. We got

18:53to push them away. Click the thumbs up below to counter them and know that I appreciate your guys' support. Alright, I'll be in the comments. See you.