Produx AI Revenue, Valuation & Funding (2024)

[00:00] Guys, Product dot ai competes with sort of Productboard and Pendo in that same space. They're doing 5,000 a month today in revenue across five customers that pay on average $1,000 per month. They raised about $500,000 worth of capital at called around a 3,000,000 valuation. Two co founders hustling, total team of five, about the two co founders split equity evenly at the start. Now going through tech stars, learning a lot about the network and growing fast. We'll [00:20] see if they can go from five to 50 customers here quickly again at product dot ai. Hey folks, my guest today is Tony. Tommy has been a startup guy since the age of 19. Landed at a startup eventually. Worked in a few startups and enterprises to see the problem and started products AI to solve it. It enables b to b product teams with intelligence. Tony, you ready to take us to the top? [00:40] >> Yeah. Let's go. [00:42] Well, what does that mean? It's very broad. Enable b to b product teams with intelligence. [00:46] >> So, yeah. When when the companies usually scale from a founder led sales or a cross small process or close group to a very process led multiple team sales GTM motion, what happens is the product teams get detached more and more from the customers. At the end of the day, they are, like, very far from the customer end. There'll be teams like customer success support, everybody interfacing with customers. And the context is always coming from those teams [01:14] >> mostly. So during that process, the product team is not getting enough context to make all those decisions. What we do is we pick up all the customer data, feedback coming in from different locations, different tools, and generate insights on top of it so that the product team can use those insights to make more intelligent decisions, more smart Should [01:35] we think of you like Segment or Pendo or who would you compare yourself to? [01:39] >> Pendo is a good example. Productboard is another good one. There are a few new companies that are out there as well doing the exact same thing. So we are we sit in between if if to be exact, we sit in between the customers and the product board so that we bridge the gap between the customers and the product team. [01:59] I see. [01:59] >> That's the right positioning. [02:00] I see. And and what are you what are customers paying on average per month to use this technology you've built? [02:06] >> So somewhere in between $12,000 to 24,000 is is the monthly price. And it it depends on how much data that you're bringing in as well. So if you wanna, like, bring in a ton of data from your past history, historic data from what the customers were talking about, like, two years back, three years back, then then it would, like, scale up as well. [02:29] So $12,000 a month or about a $150,000 per year is your average contract value? [02:35] >> It no. No. No. $12,000 per year. That's what [02:38] Got it. That's something that provides about a thousand dollars a month. [02:41] >> Yeah. A thousand dollars a month. [02:42] Okay. Very cool. Put this on a timeline for me. When did launch the business? [02:46] >> It's been super early for us. Like, ten months back, we launched it. So super The [02:50] launch gen caught late late twenty twenty two? [02:53] >> Late no. 2023, early. So somewhere in March 2023 is the exact timeline. [02:59] When did you write the first line of code for the platform? [03:02] >> That is probably March first week or second week. Once we break. [03:08] Of this year? [03:09] >> Yeah. This year. [03:10] Okay. Interesting. And did you quit your full time day job before that, or were you thinking about this idea for a while? [03:15] >> We've been thinking about this idea for a while, but quit the day job on January 31 took a month off after that and then kind of, like, jumped into it. [03:23] Okay. [03:24] >> Me and my co founder has been discussing this and a few other ideas, and we landed finally on this. [03:29] How did you find your first customer? [03:32] >> So we we went outbound fully on right out of the bat, and we didn't wanna wait for sales or anything. So it was fully outbound. Cold call was the first customer. [03:44] You cold called. How'd you get their number? [03:47] >> We use platforms that are providing us data to to, like, target the ICP. So we're like Apollo, ZoomInfo, those kind of tools to actually find out the [03:57] What what filters were you using in Apollo and ZoomInfo? [04:00] >> We for my ICP, it's basically companies ranging from 10 to $100,000,000 in and hiring product managers, having at least 100 to 400 employees, and a few more filters like location in the North American region, a few of them. [04:17] Interesting. Okay. So you call, you sell them, that was your first customer. How many customers are you serving today? [04:22] >> So we serve approximately five right now. So some are coming on board, going through security and all of that. So we are super small right now. [04:31] Okay. So it's about 5,000 a month in revenue? [04:34] >> Yep. [04:35] That's great. Now have you self funded this? I see you have a Techstars shirt on. Did you go through Techstars? [04:39] >> Yeah. I'm I mean, in in fact, we are going through Techstars right now. [04:43] Ah, amazing. [04:44] >> So what is it? [04:45] I forget what the it's like a 150 k for 7% or something. Right? [04:47] >> 120 for yeah. Somewhere in that range. So the 100 k not is like a separate one on your current valuation. Yeah. [04:55] I I see. But have you raised any other capital besides a 120,000 from Techstars? [05:00] >> Yeah. We we raised 400 k in additional from different angels and and groups that we work with. [05:07] Oh, 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 Founder Path. Check this out. I'll show you how you can access this in a second, but you log in, you [05:30] connect your 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 Founder Path dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, [05:54] you're gonna get 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. 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 [06:16] 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 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. [06:42] 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 what you can get now inside of Founder Path. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a [07:04] 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 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 [07:30] back into the interview. Okay. So about 520,000 race today in call your pre seed round plus the accelerator. [07:37] >> Yeah. That that'll be correct. [07:39] Most folks are selling, you know, 15 to 20%, especially in today's compressed market, 15 to 20% in their pre seed round. Were you in that same range? [07:47] >> Yeah. We we are in the same range. So we are in fact less than 15%. Yeah. [07:53] So if you saw 15% for 400 k, that mean that puts your valuation at something like 2,400,000 post money? [08:03] >> So our valuation is higher than that, basically. So we sell sold less than 15. And we didn't we didn't actually take [08:12] >> the Textas money at this point. We we took outside money at a higher valuation. So we didn't wanna take the Textas money at lower valuation. [08:19] So Textas lets you not I thought Textas forced you to take their money. So you're in the program, but you didn't take the money. They have no equity. [08:25] >> It's optional. So you don't you don't have to take that money if you don't need it. Tax house today [08:30] is not on your cap table? [08:32] >> They are on the cap table, but that will be for a lower lower round. So it's basically the program works in such a way that you have a fees, which is by default given. And the 100 k that they are putting in, that comes at evaluation predefined by Techstars. So we Well, what of fees [08:52] is that? 1,000,000? [08:53] >> That is that is 3,000,000. Okay. And there there is, like, some technicalities in there where if you have three commits at a higher valuation, then you get to, like, match that commit. And we had commits, but the problem was we didn't have enough proof of the committee. It was all friends and family, and we didn't like send any emails back and forth. It was all word-of-mouth that came at that valuation. [09:18] So you raised 400 k at a 3,000,000 valuation and chose not to take the 100 k from Techstars? [09:23] >> Yep. [09:24] I see. I guess what's the upside for Techstars? Why why why would Techstars let you in the program if they have no upside? [09:30] >> No. I mean, there is a there's a common stock allotment for Techstars. [09:35] How is that? Four or 5%? [09:38] >> That that is the 6%, basically. So that comes with optional 100 k as well. [09:45] Well, if you're gonna get if you're gonna get if they're gonna take 6% anyway, why wouldn't you take the 100 k? [09:50] >> The 100 k is additional than 6%. [09:55] >> You said it's [09:56] optional, but they take 6% no matter what. So if they're gonna take 6% no matter what. True or false? Techstars right now own 6% of your cap table. [10:03] >> Correct. Yeah. [10:04] Much You've taken $0 from Techstars? [10:09] >> We took 20,000. That is basically by default comes with the 6%. [10:14] If they were gonna but why would you not take the other 80 k if it's basically free money? Take the 100 k from Techstars. [10:20] >> It is not free money. It comes as a convertible note. So it's not free money. [10:24] Oh, I [10:25] >> see. Okay. Got it. [10:26] That makes sense. Okay. So you're going through the program now. What's been I mean, what what's been the you know, some people love Accelerator, some people hate them. What's been the biggest surprise? [10:34] >> It it's the biggest surprise is the the network that we can tap into right off the bat. So basically, it's like huge network that unless you so I come from India. I don't had only a few network that I could connect to easily. So Textiles opens up to a large network within their cohort and their mentors and mentees, basically. So that that helps us move faster than usual. [10:56] Very cool. And who who is who is we? Do you have a cofounder? [11:00] >> Yeah. We I have a cofounder. He's his name is Jiren. [11:03] You guys split equity fifty fifty? [11:06] >> Yes. [11:07] Ah, come on. No one was no one was worth more? [11:11] >> I mean, we we thought about it hardened, like, for a long time. So Mhmm. We decided to plan that. [11:19] Who's doing the all the engineering? [11:21] >> He's doing all the engineering, basically. [11:23] So you're the sales guy? [11:24] >> Yes. [11:25] Alright. How do you go from five customers to 50? [11:29] >> It's right now, we are just focusing only on outbound. So basically, five to 50 would be still outbound, 90% outbound, 10% is brand positioning and marketing. So we're not expecting inbound or any PLT motion at this point. So fully outbound, that's the way we are going. [11:45] And just the two of you hustling right now or is the team bigger? [11:48] >> Team is five. Three more additional people. So two engineers and one designer at this point. [11:52] Two engineer. Okay. And interesting. You're the only sales guy though. Right? [11:55] >> Yep. [11:56] Very cool. Alright. On that note, let's wrap here with the famous five. Number one, what's your favorite book? [12:01] >> Sapiens. [12:03] >> Yep. [12:04] Number two, is there a CEO you're following or studying? [12:06] >> Yes. We work closely with CEO of docket.ai. So he was the chief data officer previously at Zoom in for Arjun Pillai. [12:14] Number three, what's your favorite online tool for building products? [12:20] >> Right now it is Google. So it's a very [12:24] Number four, how many hours of sleep do get every night? [12:28] >> Somewhere in between five and seven. [12:30] Okay. Situation, married, single, kids? [12:34] >> Married, no kids. [12:35] Okay. And how old are you, Tony? [12:37] >> 29. [12:38] >> 29. [12:38] Last question. [12:39] Something you wish you knew when you were 30 or sorry, when you were 20. [12:43] >> When I was 20. Yeah. Keep pushing. I stopped a bunch of I wrapped up a bunch of startups and shouldn't have done that. [12:50] Guys, Product dot ai competes with sort of Productboard and Pendo in that same space. They're doing 5,000 a month today in revenue across five customers that pay on average $1,000 per month. They raised about $500,000 worth of capital at called around a 3,000,000 valuation. Two co founders hustling, total team of five, about the two co founders split equity evenly at the start. Now going through tech starts, learning a lot about the network and growing fast. We'll [13:11] see if they can go from five to 50 customers here quickly again at product dot ai. Tony, thanks for taking us to the top. [13:18] >> Thanks, Ben. Thanks for having the time. [13:20] One 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 one [13:45] pm central. 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 [14:08] big fundraise, a big sale, a big profitability statement or something 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 You can go in there and quickly search and see what people are [14:29] saying. Sign up for 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. 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. [14:49] We got to 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.