How Smartlook CEO Petr Janosik grew to $11.8M revenue and 2K customers in 2024.

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is peter yanasek he's building a company called smart look which records users on websites and an ios and android apps with features that allow you to find useful information even in thousands of recordings in no time peter you ready to take us to the top okay so talk to talk to us about the product this sounds a lot like hot jar how are you differentiating yourself from other tools like hot jar this is a good question because it's the most common question people ask us that very often basically what we do we are combinating two markets we are combinating session recording market and uh event tracking market and we can do both into one solution so you then you are able to filter uh session recordings through events uh you can filter uh session recordings through in you know in funnels or or in your uh cohort retention code and so on so it's much better when you want to analyze your user behavior and so i have a bunch of questions about this but i want to understand kind of a backstory and traction here first so what year did you launch the company we launched company in 2016. okay basically we raised just small amount of money uh in 2016. how much but it was to 250 000 uh us dollar okay and is that all you've raised to date sorry how much total have you raised to date that's it okay just 250. yep all right so here's the big question then how good are you with investing that money to drive growth what's revenue today we have 2 million another one right we grew quite well uh we started with small customers in the beginning uh but then into it was like after one year and half we launched smart look we changed our strategy we are going up market so we are focusing on bigger customers right now and uh that was good decision because we are growing quite a lot like it's around seven eight percent per uh month over month so let's break this down real quick you're at a two million run rate today how many customers are you working with it's uh 2 000 customers okay 2 000 customers and what do they pay on average per month 2 000. what do they pay on average per month it's around 80 80 okay yep that works so 80 obviously times 2 000 puts you 160 000 a month or about a 2 million run rate now where were you exactly a year ago do you remember how much revenue you were doing then oh basically we are doubling uh almost every year it was like 90 percent grow so this is like last year it was 70 uh around 70 000 mrr last year and now and now you're up to 160. it's now it's february so uh like this december 2019 it was 140 uh december 2018 it was 75 something like that got it yeah it's about doubling your rear so this is a great story so i love that you've done so much with such little capital this is like my favorite kind of entrepreneur to interview so thank you i appreciate you coming on so walk us through the magic right how did you get your first hundred customers basically by the way entering a market that a lot of people would say hotjar is already dominating oh yeah we when we started in 2016 it was for free for 10 months we launched it as a simple recording tool for free it was unlimited uh you could record everything and for 10 months uh we offering it completely for free uh there was no pricing it was uh there was just free package okay but how did you know how did you eat the first hundred people to view the website and try it for free uh because it's not our first startup we also had another startup before uh which is called smartsup it's livechat so we saw in google analytics where our customers are coming from so we were able to predict that it can be the same uh so we uh target uh the same uh channels or are we trying to be visible on that channels we were visible with our previous project okay so you let me just break that down you had a prior company you had a prior company with a bunch of users it was it was a chat product and your intuition told you that those same customers would be interested in this new product line so you basically looked at what channels were driving your old company traffic and you went to those channels for this new product and that's how you got your first 100 customers for smart look yeah is it going like that i see okay so you're free in 2016 how many free people signed up before you launched a paid option oh it was after 10 months we have uh 100 000 sign ups because it was for free so it was kind of a wireless a lot of customers uh or a lot of sign ups recommend us because it was free then after a couple of months uh david from hojar called me and asked me like what are you guys doing it looks pretty good so we already know each other like we discuss it with uh david from mojo did he try and buy did he try and buy you uh not yet so what was he calling for then two years ago oh it was like it was in 2016 so it's it's uh much sooner but uh he was just wanted to know uh why we launched marlux what'd you tell them i don't remember exactly but we used the session recording feature in our previous project this is live chat so we wanted to help our customers to see what customers do when they are chatting with them so basically we started uh building this feature in uh in our previous project uh but then we just take the feature and build it as a separate project so that's how it started uh so this is this is what i told him uh like it's uh we are just trying to see if customers are interested in uh this feature as a separate project and it seems that they are interested because we had a lot of signups every month so you had 100 so you had 100 000 signups after 10 months is that when you launched your pricing plan it was 10 months in uh then yeah after after after that we decided to launch punch pricing because we already had a lot of infrastructure costs so we decided we need to know like if if we are able to monetize that or not what was your what were your total costs per month when you were still free do you remember we used uh in 2016 we used a lot of facebook marketing uh paid facebook marketing like uh performance uh marketing on facebook and we get like four sign ups we paid like five seven euro maybe something like that to get one sign up mm-hmm okay well so how much did you spend on facebook marketing that that year uh whole investment like it was like two thousand two hundred thousand dollar dollars okay so you didn't tell me this when i said what was your growth channel you said it was your prior company no your real growth channel was you spent a quarter million dollars on facebook ads paying five to seven dollars per sign up uh sorry i i didn't hear you like in a couple of seconds yeah i was just saying your big growth channel in 2016 when i asked you earlier you said it was your old company but really it was you spent 250 000 uh to get signups at five dollars a pop like you you asked for first 100 custom customers so first 100 customers was from organic channels but then we realized that let's try uh performance channels yeah like facebook google ads and stuff like that and we saw that facebook was great for us uh but then after a couple of months we realized that there are just small customers they were churning a lot so we cut that channel and uh we don't use it anymore so 200 000 divided by five is about 50 000 sign ups that you got of which a lot of those customers were very small they churned a lot but some of them told their friends and you had some viral growth and some of them were also potential enterprise leads that right in the beginning it definitely helped us a lot uh i don't i i see that i would do that same again if i'm in 2016. uh it was a good decision uh we find some first customers they are small they help us to grow but now we have to focus on bigger customers what was your product what was your price point your first price point that you launched it was very very cheap we started with uh i think it was 10 or 15 15 per month okay for like unlimited everything that was your only option oh no there was i think 100 100 000 sessions per month [Music] and so what did you grow revenue to when did you launch that pricing was that 2017 now it was uh in december 2016. we launched it in february 2016 in december after 10 months we launched pricing okay and then what was your total revenue in december uh sorry in 2017 uh for whole year yeah not sure i would have to check that let's say yes probably 40 or something in the end of the year in december 2017 it could be something like 40 mrr 2000 okay so you maybe you did like 300 or 400 000 total that year i can check okay but what do you use to track this stuff that's a good tool so guys just while peter's looking that up just to pull some lessons out here again you know they built a two million dollar ar company with 250 000 raised but the majority of that raised went to paying five dollars per sign up for a free tool for 10 months so he kind of suck it up for 10 months get 100 000 users before launching their 15 a month price plan and now scaling uh nicely with about two thousand customers paying on average eighty dollars per month so peter you have that number 2017 total revenue uh yeah this december 27th uh to 2017 was 44 000 mrr okay and you grew that to about 70 000 in december 2018. 46 000 and 140. yep yes it went from 44 grand a month to 70 000 per month to uh 140 000 per month year over year yeah yeah that's obviously again good growth so what's the plan i mean how are you well actually flesh out the team first how many people are on the team today it's 30 people we started hiring a lot this year because yeah we see a huge potential that we don't have enough people so just 30 people in a team okay 30 folks today and how many are engineers i would say how okay any quota carrying sales reps uh we have no we have three okay they actually carry a quota like do they have a sales target a quota target it's for whole sales team or for one cell guy for for whole sales team it's uh for around 4 000 mrr every month got it so each year they should be adding about you know call it forty eight thousand dollars in new monthly recurring revenue yeah we just started with sales it was self-service all the time uh just last year we started sales uh representative so we are just trying how to do that we are learning a lot it's it's something we have to improve what have you learned so far uh that it's also a good uh channel like i was my background is a performer marketer and use designer and uh programmer so i was i always wanted to do sas with performance marketing not with sales guy but then i changed my mind in 2018 i realized that if i want to go to a market i have to change my mind and we need sales people because companies want to talk uh with us so that's the main difference with how i see uh business now and i saw it uh three years ago yep now where are you today in terms of in terms of capital rights are you burning cash each month or are you guys profitable uh we are cash flow positive uh from february 2018 so it's uh one year now okay and then how casual are you talking twenty thousand dollars a month to the bottom line fifty thousand dollars how profitable do you know i have this number in check grounds yeah take your take your time and look it up um while you're looking that up do you know churn off the top of your head sorry guys let me calculate that first it's about like 35 40 000 to use dollar uh cash in our every month we have cash but uh we want to invest it uh this year we want to invest a lot uh in what team team yeah if we are still small we need more people in that team in sales how many people do you think you'll have on the team by the end of 2020 20 new people 20 wow okay very cool all right what about churn churn's critical obviously in a sas company what's your gross revenue churn over the past 12 months he's refreshing chart mogul i can see it in his eyes no never uh i i can say you net it's better okay because as i said we started with small customers they are they are still there they are still paying they are still churning uh but we are focusing on new power users uh which are mostly enterprises and big companies so we are upgrading them a lot uh we're changing pricing like four times per year uh so we are good in upgrading them uh so net is uh net mrr churn is about one to two percent okay got it some months we have negative we uh upgrade a lot of current customers sometimes sometimes via negative charge can you split those out though because the net number is not really as valuable as splitting out the gross churn and then adding back the expansion are you able to break that down yes you want to know how uh what's this extension what did what's its uh literally take all the customers that were paying exactly a year ago and look at the revenue number ignore logos just the revenue number a certain percent of that revenue was lost because people downgrade and churn and then a certain percent of revenue was gained because you up sold other customers in that same cohort so the question is you were doing about 80 000 a month a year ago how much of the 80 000 was lost on a percent basis and then how much did you gain on top that from expansion revenue [Music] dead number i can't say you but uh for example last month uh from extension we have uh like five thousand almost six thousand uh new mrr and upgrades from upgrades yeah they did that's our upgrades and how many downgrades downgrades it's about 1.5 thousand okay 100 it's uh conduction yep we have a lot of reactivation as well yeah then new businesses within the mrr so basically uh extension under activation new businesses generating us like like eleven thousand uh net new mrr grow every month last two months is about ten thousand eleven thousand uh new mrr every month including new customer ads yeah well yeah again churn data does not include new customer additions it's just looking at historical co-work performance but generally what you're telling me is you're about 100 net revenue retention your upgrades more than make up from the downgrades from that same cohort yeah okay very cool what about customer acquisition cost today so what do you what are you paying to get a new 80 a month customer it's a one to five what do you mean one to five uh like customer acquisition cost uh it's like if we have lifetime value about one thousand uh one times a dollar uh so our customer acquisition cost is 200. okay so is that what you're paying right now 200 to get a new customer that pays 80 a month yeah including all the costs for uh employees and okay i mean that's healthy right i mean that's a two or three month payback period so that's that's very manageable are you looking at raising capital today maybe in the end of the year we are thinking about it because right now we have a lot of money we need to grow team and uh we are preparing ourselves uh to be ready for investment of the day well how i mean do you have a lot of runway how much cash do you have in the bank right now couple hundred grand again using check grounds what's this while you look that up what's this tool that you use in case other people want to use it it's called check rounds check grounds to ground it's our currency here oh we got it you have to convert it let me check it's hard to say because uh we still have to do product in uh in uh one company we are still one company but we have to product as i said we started with uh smart services live chat solution and yep that's why we can't race now because we need to spin off smart look from our current company and create as uh creates markup as a separate company well how much revenue does the other company do uh like it's uh almost like the same size smart sub has the same size as smart so like uh it's a three it can be like 300 000 mrr right now yeah so yeah so total right now you're doing about four million dollars in annual recurring revenue across these two products yes yeah yeah so how okay so how much cash in the bank me calculate that what and where are you basically in which country it's uh czech republic it's close to brock yeah it's very second biggest city so we have around uh seven thousand uh seven hundred seven hundred thousand uh dollars yeah so you don't need you don't need to raise capital right now you have plenty of runway to work with yeah um if you do raise capital later this year how much would you try and raise this is something i don't want to share well is it you don't want to share it or you're not sure uh i don't want to share it okay so you already have a target of how much you would like to raise uh if we if we plan if you if we raise in the end of the year there will be completely different mrr so it's hard to say okay yeah that's what i was saying is you're actually not sure because you don't know how much you're going to grow over the next eight months uh yeah even if i know or there is some prediction uh i don't want to share it now yeah yeah our current investors yeah well so who did you take the 250 000 from oh sorry you've already raised 250 grand who did you take that money from oh yeah uh from czech investors uh we have two uh there was no investing uh two investors who invest us uh in 2016 so reflex capital and uh web node it's uh also sas company uh yep something like website builder i don't know yeah i know all right very good let's let's wrap up here peter with the famous five number one favorite business book oh i have a lot of them almost everyone is good maybe last year was a radical calendar number two is there a ceo you're following or studying i don't follow any no number three besides your own what's your favorite online tool for building the company favorite tool i use my to-do list it's uh gtqs yup number four how many hours of sleep do you get every night seven uh and uh what's your situation married single kiddos uh i'm married uh i'm expecting uh you ladies in three weeks you have a baby coming in three weeks yeah wow that's exciting congratulations all right and how old are you 33 33 last question what do you wish your 20 year old self knew uh study more drink drink glass uh spend less time in clubs and pubs what's green glass uh i said study more uh drink drink glass oh drink less time in clubs and pops guys there you have it peter launched smart looking as a free tool in 2016 to compete with companies like hotjar right basically a user session tool they spun out of their last live chat company both companies now doing about two million dollars in terms of run rate they got their first hundred thousand sign with spending 250 000 on facebook ads signing free trials up at five dollars a pop they've now grown that into 2 000 paying customers paying on average 80 per month for about 160 000 per month in revenue 100 year over year growth uh they're profitable taking thirty thousand forty thousand to the bottom line every month sitting on seven hundred thousand dollars of cash in the bank so no rush healthy company they've only raised 250 000 peter i love this story thanks for taking us to the top thanks for inviting me you guys know i fight like heck to get these data points for you from these ceos that rarely do these kinds of shows if you want more shows like this make sure you subscribe right now we're trying to get 10 000 youtube subscribers by the end of september here 2019 and it would mean the world to me if you clicked now 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