How Sensorberg CEO Stefan Scheuerle grew Sensorberg to $1.6M revenue and 20 customers in 2024.

hello everyone my guest today is michael von roeder he is a works both as an entrepreneur and a corporate executive he currently serves as ceo of senzerberg a sas iot company as the founder investor of various startups in the areas of mobile energy and fintech he's firmly anchored in berlin and the international founding scene all right uh michael are you ready to take us to the top i am all right so just to be clear so sensor berg were you the actual founder or you were an investor that then took over the ladder the ladder and then i i jumped in uh you know let's say in a difficult place i was gonna say okay so do you still speak to the founders this question will reveal a lot yes i do he sits at my board and i actually meet him next week for lunch so it's all good oh very good and and team size obviously it's a tough transition were you guys still fairly small and nimble or is this a big transition no actually it was i i took over the company with 30 people it's now 30 again but the people are different mostly uh i see okay so about 30 folks good okay let's get into the product what's the company doing how do you make money we make buildings interactive we usually start with accessing the building because that's usually the first interaction with the building so we do digital access control and from there we bring in sensors and actors like you know heating valves and temperature sensors and we control the lighting so what we're trying to achieve is an interactive experience with the building so you can enter you can book your meeting rooms you can receive your amazon package you can receive your groceries and so on and we do that with an open platform because we believe in the future it's not going to be like the ge or cements doing all that with a proprietary solution but it's you know many folks can contribute so we work lots with other startups who provide their apps and we integrate with them and so on and we make money well first of all we do our own hardware so we make money with that and the margin sorry the margin on that business is what uh well 50 right now but actually in my ideal world i would give away the hardware for free and just make money with the second part which is a sas model so you pay basically let's say i don't know 10 bucks per dollar per month if you have one door if you have more doors like we have customers we have 200 doors obviously you pay less and then you can add additional sensors and access and you pay per unit you connect to the iot platform interesting okay so um i don't want to go down every single kind of customer size but on average how many doors does the customer have average is difficult because it really ranges from one door to thousands but on average that would be 500 but that's a bit misleading so okay you know there's let me ask you differently let me ask you differently how many total doors are you installed on today let's say five thousand five thousand okay across how many different kind of logos if you count in the tenants it's a lot of lowers let me say 20. okay 20. good okay good so this is tip this is kind of like an enterprise sale you find one of these 20 people you say how many doors do you have boom you do the hardware you do the software and then you go to the races that's the idea although we usually start with we start with co-working spaces because for them it's really nice to have our solution because they you know they built they have a member member app and we make the member app smarter so the member is not only for engaging with the community but also with the physical space of the co-working space interesting that's our pitch right and then what happens is that corporates they all you know the new way of working and stuff so they they um use co-working concepts and that's how we get into the corporates okay and the um the 10 bucks per door that's obviously just on the sas side right that doesn't touch the hardware yes okay so that means like i mean can i take ten times five thousand dollars you're doing about 50 grand a month right now i'm pure sass theoretically yes but obviously we give some heavy discounts a to grab some of the market and b if you have more than one door you know it goes down why because in the retail in the sorry in the real estate industry at least in europe very conservative so they don't understand sas so they want to buy the whole system yeah so what we do there is we say hey no problem you can pre-pay for seven years and that's what they've done oh very good um i want to talk i want to talk more about that in a second so i mean give me a more accurate number then if it's not kind of 40 50 grand a month what do you guys add today in terms of just sas we make this year we make roundy about 25 million euros overall and i would guess 20 is recurring for now okay interesting okay so 20 percent of 2.5 million so you've got about you call it 250 well about 500 500 ish something like that yeah interesting at the magic you know uh crossing like i say we need 100k monthly you know then we start making an impact yeah so 500 000 500 000 kind of euros over the past 12 months that's about 574 bucks we could consider that kind of arr in the states this means that your hardware business is significantly i mean it sounds like it's pretty significant um what do you need to do in order to drive the hardware costs down so you can get more adoption increase the batch size so right now we you know produce batch size of two to five hundred once we can produce five thousand at once we go to china we already have sourcing partners there because that's one of my previous businesses and then i would say if we get the our buying cost uh to down to 100 down to lower than 100 euros then we can start thinking about having a mixed model so we give the hardware away and then we just do pure sass interesting what's your cost today kind of per door more than 200 if you just take the door controller for free yeah interesting now how i'm guessing you probably raised capital to help subsidize this a bit how much have you raised overall more than five million okay five and and when was that was that before you came in or after or [Music] so i raised the uh i'm currently raising another round of you know a low single mill in digit uh because i want actually us to be able to go break even late next year early 2020 uh just as a theory because then we are free and we can do whatever we want yeah okay so you're raising what you said like five million ish right now something like that yeah a bit lower maybe a bit lower we don't need that much because our sales are going up so i'm quite happy okay so so you'll raise a three and then or something like that like something less than five now and then the goal there is to essentially help to drive you guys towards break even by late 2019 early 2020 bring your kind of cost per door in terms of the hardware under closer to about 100 euros and that'll give you significant significantly more leverage yes interesting um one of the patterns i see whenever i see kind of an iot device paired with a sas product on the back end is retention tends to be way higher because there's actually a physical piece of hardware installed is that true in your business what's retention it's totally true i call our door controllers the trojan horses to the buildings that's by the way why i give like so much discord on the recurring because i know once i have them we have zero churn we have zero churn so far in the whole history of the company okay interesting and when would give us the history when was it launched but this product was launched two years ago okay so 2016. what we also see is you know it's not only zero turn we get one let's say co-working so you get one space for mind space or we work once they like it you grow with them so we have several co-working spaces in germany and we grow with them every every month they open a new space and we go in without additional sales efforts so what so what is your typical year one year two expansion on a customer uh well i would say usually we start with one uh i i take one which is called unicorn here in berlin so we start with one just two months ago now we're at six next year they're gonna do 20. okay 20 doors it's basis buildings okay but i don't know what i don't know what your revenue is per building i just know the door thing so how many doors is that so let's say that's in an average space let's say it's 50 doors so you go from 50 to 300 to what would that be 2 20 spaces times 20 or 400 you know yeah 400 okay interesting so it grows nicely yeah yeah okay so do you i mean do you calculate some of the typical sas metrics like do you know what net revenue retention is year every year we don't do that yet because our base is too low to make is this is proper statistic i would say yeah but but it's it's definitely greater than 100 though because you're expanding yeah yeah definitely what's right now the the biggest you know we look at more closely at our sales cycles and customer acquisition cost that's something i want to know first because then uh you know customer lifetime value is...