How Smartbeat CEO Paul Trappitt grew Smartbeat to $5.9K revenue and 5 customers in 2017.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is hent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka I just finished traveling Southeast East Asia for 41 days and I usually always get sick when I travel and quite frankly eating is difficult for me it's hard to find a restaurant and I'm spoiled in Austin with my personal chef well I took these little packets with me this time 30 of them in my carry-on suitcase they kept me totally healthy with 11 different secret ingredients you can see them at Nathan la.com juu I'll tell you more later on in the show that's Nathan la.com slj Nathan L here this episode 6 19 and coming up tomorrow morning you'll learn from Pep Lea in episode 620 he's a father of 2 and 36 years old and his company conversion XL is doing $200,000 per month with three products including a live Master Class an agency and a selfs serve model good morning everybody Nathan ly here and our guest this morning is Paul trait he is currently the CEO and co-founder of smart beat which is what we'll focus on today before that he was a senior business analyst at Australia bank and a senior project lead at s IQ Paul are you ready to take us to the top yeah hi Nathan nice thanks for having us great thanks for coming on tell us what does smartbeat do and what's your business model how do you make money um smartbeat is about helping small businesses to navigate the uh complex um Omni Channel marketing uh uh Escape I guess um and we're really about simplifying that that whole environment down so that um so that small business owners can actually get some value out of it um so uh you know they they they don't have the time or money to sort of understand all those different tools and all they're getting from from what's out there at the moment is graphs and charts and statistics and and it doesn't really do anything for them so so we turn all of that into real solid actions and measure what they're doing and and let them know what's working and show them real real return on investment on their marketing spin okay so give give me an example of this a real example of of a paying customer uh um so Jim's Cafe for instance um you know he's he's got lots of customers that sort of EB and flow through his business you know he doesn't he doesn't know all those customers some some some customers come in and they're really vocal and he probably knows you know a hundred of those people um and you know they're out there talking about him but there's lots of customers in his business that probably think he's doing a really great job but don't really talk about him or or or or or don't you know they're not quite as vocal and he doesn't really know their names um so we're giving him some technology that helps him to really start to make a connection with those people so it's about using the people that are already in your business um so it's like Kevin Kelly's you know thousand true fans uh philosophy it's it's we want to turn customers from from passes by to customers to to loyal customers to raving fan Paul is this just for retail brick and mor locations um at the moment we're focus on we're focusing on hospitality and bricks and mor retail but um but the principles of what we're doing apply to to any business whether it's online or offline okay um but we just see that there's a gap at the moment with those with those bricks and Retail um bricks and Mort retailers what are you doing I want you say you want to make Jim smarter the cafe owner are you tying into his POS system I mean give me a specific example of something a recommendation you're going to tell him that that helps him with his business yeah sure so let's say um you know Jane comes into his Cafe and um she comes in two or three times a week but you know she doesn't really he doesn't really know her name or whatever so we we might use Facebook marketing or point of sale in the store to encourage Jane to say log on to the Wi-Fi because there's a free offer if she logs on to the Wi-Fi when she logs on to the Wi-Fi she'll do that via social media um be that Facebook or Twitter or Instagram and make that connection and and for doing that and providing that bit of information about herself you know an email address or whatever it is um you know we might give her a coupon to get a free coffee or maybe a coffee with a if she buys a cake or something like that so so she's going to make that first connection then you know the cafe owner's got got that that information about her he's got that email he's got that connection and he's able to start that conversation it's really about you know nurturing those customers like I say through that life cycle of just being a passer by or being a being a customer that comes in every now and then that you don't know their name through to really kind of giving them some value um and and that customer then you know becomes a little bit more engaged and once they're more engaged you can continue that convers ation with them through through social media or through offers or Lo program so Paul are you a smartbeat installing the Wi-Fi connection Connection in retail locations and that's your way to get data on customers which the owner like Jim can then use yeah Wi-Fi Wi-Fi is one part of the technology that we have so we provide the business owner with a drop ship little device they just plug it in the wall it sorts itself out and configures itself and um and and and then they've got this ability to run these different Wi-Fi campaigns but one of the things that we've got different is um we don't just use Wi-Fi we use lots of different technology and we plug it all together for the other ones okay so so from social media to Google anals to does what does that mean like I don't understand what that means when you say social media so let's say for instance so let's say for instance we're using audiences in social media and we're trying to reach out to people that are like a specific thing so let's say your your Cafe's got a certain theme or you're you're running a certain Product Promotion that week you know we're going to start to Target that audience within social media using using say Facebook's audience audiences tool so we start to reach out to them those people that click through to that to that post or that content that inbound content um you know we can we can put them into a bucket and when they come into the store and they log into the Wi-Fi we can connect them back to back to that post that they've actually seen outside of the store so what is the what's your business model how are you generating Revenue so we uh we we're we're a SAS platform with a subscription so for our retail customers we we do uh it's $99 a month it's it's $250 to start so that gives you the device and sets up the account and then it's $99 a month um and that gives you access to our core four Services which are a Wi-Fi presence analytics social media and um and our patent pending uh new Wi-Fi technology called smart first Contact uhhuh and what is how many customers are you working with currently uh at the moment we've only got five where uh we've just literally just launched our beta um we've been working we've we've had a Wi-Fi company for about three years we we started out um and built a social integrated Wi-Fi business um about three years ago and we had quite a few customers on that but um Todd and I realized my business partner Todd sby um we we kind of realized that um there was a bigger picture for small business um there there's a lot of big players in the Wi-Fi space how much revenue how much revenue did your Wi-Fi business do in 2016 2016 uh about $20,000 okay so you it was just too small it wasn't big enough so you said we have to Pivot no and and and like I said there's so many big players in that space and when you look at Presence analytics which is you know mobile phone tracking I guess um you know there's there's probably 60 companies in the valley doing that um you know and there's marketing tools but like we we kind of just realized that for small business those tools are just inaccessible because they they're too hard for them to use and they're too hard for them to understand actually apply the information they're getting that we realized where the Gap was was hey let's bring all this data together and let's make it actionable so so we we created an action based platform really and so Paul where are you is this self-funded or have you raised Capital uh we raised $250,000 in in um in little Western Australia which is a might not be a big amount for for others but yeah it's pretty good for for was that an angel round was it an equity round or convertible note uh it was a yes a seed investor so per private private investor was it a convertible note though or was it a priced Equity round no it was it was Equity Equity with with um a part part loan okay and how did you come up with a valuation because you obviously were pre-revenue um yeah it's an interesting one there um so we we when we first started out we actually won an innovation fund from a local government how much um they...