Shineinterviewrevenue & funding

hello everyone my guest today is david koppel he it was originally a software engineer now a serial entrepreneur loves applying technology to solve real-world problems and like the best of ideas shine is an idea born of frustration and real-world experience of the recruitment process uh the company helps video interviewing and value based recruitment at shineinterview.com david you ready to take us to the top yeah looking forward to it all right so um what do we need to know about what the company does and then what's your business model is it pure play sas it is sas yes so shine is a pre-hire recruitment and screening platform so we use video interviewing and values-based recruitment to allow our clients to reduce the time to higher by well time and cost to hire by up to about 70 and also getting a better quality of candidate coming through to the next stage so as you mentioned it's born of frustration really and i guess my background um in a previous company previous sas company as a cto going in there um as part of a founding management team and growing that um from six people up to about 50 and experiencing i think the frustrations of the recruitment process so you know you get recruiters sending you cvs or resumes and you know how do you how do you sift how do you manage that process um you you know when you get them in pretty quickly from sometimes from the walk from reception to the interview room if they're a good fit or at least if they're not can you improve clients will they fit in with the team and so on so yeah that's uh that's where we really got to and um essentially uh we exited there in 2014 and uh going into 2015 looking to set something up myself um bootstrapping the company at the time but over the course of 2015 that genesis of an idea then evolved into into shine which we launched in 2016. okay so 2016 launched and what are people paying you on average per month for access to the software yeah so um it's it's an interesting one we've got we've got a range of clients so um how many i'll put some averages in in uh in a sec so there's about 50 55 clients uh using the platform at the moment ranging at the lower end um sort of three four man band recruitment agencies right up to multinational corporations across different countries so um you know we we've got entry level pricing um which is quite uh accessible right up to mobile sport deals depending on how people are using the uh the platform so i'd say an average that might be about 10k per year that people are paying us uh usually that's paid upfront okay and what are they getting for that is it is it like a number of recordings or what's the value based metric you price against [Music] yeah exactly so uh generally it's based around the package and how many interviews they've they're able to go through that process but in addition we've got the value-added service that we try to provide around that as well um around your integrations or having a better service that we can offer so the pureplay sas side though at ten 000 bucks a year that's about 800 bucks a month times 55 customers means you're doing what about 45 000 bucks a month right now something like that yeah 45 50 a month at the moment yeah okay and what does growth look like what were you doing exactly a year ago yeah so we're growing year on year about 60 at the moment so we're doing um about 350 last year this year um looking to uh it'll be about 600. yeah so just just to be clear when you say 350 last year you mean your run rate in december was about 350k uh yeah yeah okay so that would have been about 30 grand a month you're now at about 45 50 grand a month yeah that's right okay and where's most that growth coming from is it is it these customers paying you more because they're using it more or you're adding brand new customers all together it's a combination so um yeah it's uh we're in a good position where we can actually grow uh existing client base uh which is really good especially when you're able to to maybe start in a single entity and then some of the organizations we work with obviously uh multinational corporations and and spread out from there and so that's a good way to get a footprint into an organization but there's a lot of new business coming online um at the same time as well and where what's the growth channel you're using how'd you get these 50 customers um a lot of it is uh is outbound um so we will go to uh exhibitions trade shows and the like we've got an in-house uh sort of sales and marketing how many how many inside sales yeah inside sales so we've got three in that team and uh somebody in marketing as well so total team size is about how many uh the company is uh 10. okay so about three or four marketing and sales yeah yeah and everyone's in the uk or is folks remote uh we are predominantly based in the uk so we're based uh in the northeast that's right um but we are looking to develop partnerships as well um so that's something really which is a bit of a focus for us over over the next few months as well and david have you bootstrapped this or have you decided to raise capital and it's uh yeah it's pretty much to date um and actually just took on a small uh seed round uh just in december okay so you're not bootstrapped i mean you're is you're either bootstrapped or you've raised capital so you've raised capital how much have you raised literally just two weeks ago we closed that round so it's great um open up until that point yeah bootstrap until then um so it's a fairly small round so uh just did uh 350. okay um and really the the idea there is to just give a bit more to play with in terms of the sales and marketing was it a priced round or was it a convertible note yeah it was an equity play it was okay it was a priced round and you and you raised from what wealthy individuals in the uk or u.s investors or who um yes uh a vc mess here in the uk uh who that does that okay very good and then walk you know other economics critical to assassinating things like churn can kill a company what's your turn today and how to make sure to keep that low yeah and pretty good actually so we've only ever lost a handful of clients um probably less than less than um five percent in terms of global chain which i think is quite good we've never had anyone uh move to a competitor for example which is is really good um so we we need to just make sure we're keeping that up when people leave it's because perhaps their recruitment needs have perhaps changed or um your their way of using the platform is slightly different um in terms of revenue and that's actually negative uh so as i mentioned we're able to grow existing accounts as well so that's something we're really trying to focus on as well how negative um it's sort of probably running between five and ten percent um so negative five percent kind of net net negative revenue churn annually yeah yeah and where is most the expansion revenue happening what pricing x's are you upselling against and generally it's it's within the the client success team working quite closely with our clients to make sure they're using the software in the best possible way but once they see the benefit how can they use that in different ways how can we use that in different org or different departments for example as well so um it's obviously picking out the opportunities and who's best to focus david sorry just to be clear is it upselling number of seats is it upselling number of recordings is it upselling feature up sells what's the value metric you're up selling against yes so it's um not not seats but it'll be it'll be functionality it'll be um it'll be volume that they're putting through so that might be recorded interviews as an example interesting okay um that's healthy and that's kind of so it's good i mean so if you have five percent logo turn annually and 10 expansion that puts you at about negative five percent net negative revenue turn annually those sound about right it's it's about yeah yeah interesting um in terms of growing the company i mean you're a developer on the back i mean are you doing any direct paid spend uh to to drive new customers yes we will we will spend a little bit on um sort of external exhibitions and trade shows that kind of thing obviously the the content marketing side is quite big for us as well so there's various different things that we'll be looking at there and are you i mean so when you look at your fully weighted cac to get a new customer paying you 10 grand a year what are you willing to spend on that yeah so it's uh it's around about three and a half k at the moment and where is most of that going sales like head count and salaries commissions he i would say the majority about his head count commission um and then there's maybe a small amount of external spend as well yeah that's great and then are you i mean how aggressive are you being now that you raised capital are you burning a bunch of money each month or you're still operating at profitability yeah well um i mean it was literally two weeks ago that we uh we closed the rounds so we're going through a recruitment phase at the moment so we're looking to head uh at headcount there yeah better go well right you have to use your own tool and do that very efficiently that's right yeah so uh yeah absolutely um so yeah i mean we've got we've got plans to be a bit more aggressive now which i think is the really exciting thing um when you're bootstrapped it's a little bit more difficult uh i i think you're just taking those risks and knowing that at the end of the day you've still got to meet payroll and everything else so you've got to do it in a sustainable way i think what's quite exciting now is we can look at product development and look at um other ways we can expand out and really aggressively go after the the sales side is the key thing very good all right david let's wrap up here with the famous five number one what's your favorite business book um i would go up for lean startup um not something i would follow religiously but um i think some good concepts in there and um remember sort of a few years ago walking in with a piece of paper with some printouts on to the uk's largest uh holiday park operator so that was my mvp at the time and uh came out with a verbal deal and there's still a client today number two uh is there a ceo you're following or studying right now i would say uh maybe richard branson i think a bit of a maverick and cares about some good issues as well number three what's your favorite online tool for building the company i think zapier is really good it's something under the radar but touches a number of aspects of our business so i think it's a really useful tool yep just had weight on the show they've just passed 50 million bucks in terms of ar really healthy company uh number four how many hours of sleep to get every night i'd say around six and a half and what's your situation married single kids married i've got a four year old and four months old holy mackerel okay two kids and how old are you i'm 37 37 last question david what do you wish your 20 year old self knew happens but uh it's usually got a way of working itself out so you don't let fear stop you or fear or fail you stop you from trying things ben horowitz said in his book if you're going to eat don't nibble right that's how it works guys from david launched his company shining and helping people do more efficient interviews specifically hr teams has about 55 companies right now paying 10 grand per year so 45 grand a month in revenue up from 30 grand a month just a year ago they just raised 350 million bucks in terms of funding basically operating a break even up to that point 10 people in the uk economics-wise about five percent local turn annually ten percent expansion so negative five percent uh net negative revenue churn annually spending about three thousand five hundred bucks to get a new customer so four-month payback period as david looks to scale david thanks for taking us to the top love dave thanks very much