Social Media Directions Ltd. Revenue, Valuation & Funding (2024)

hello everyone my guest today is andres tosi he is a husband and father of twin boys entrepreneur business owner for 23 years big follower of god 21 years of business networking franchise social media specialist motivation education inspiration you name it now building smd dot com andrus you ready to take us to the top i am yes okay what is smd is it sas or an agency it's actually a susp company so it came from an agency the original company was an agent a digital marketing agency are mainly focusing on on paid adverts and the story started with a with a really interesting uh step for us basically when me and my co-founder is two business owners in the business me and my best friend we we started as a house and like a side project uh this company and we landed a huge contract so it started with a with a huge contract we talked about the 4250 company in the uk um like a billion pound revenue company how much money was that contract for uh it was a potential for a million uh million pound at that time and how did you how did you get that deal that's a big deal well it's uh i think it's down to the to the uh talents of sales and politics how we build it up and and and it was some connections and uh to to the company originally and there was a trust build it up on our knowledge and they they decided to work with us it was it started with a trial for a business for a region and then it would potentially grow uh for uh for a whole nationwide contract so what are you doing for these customers that was uh that was facebook paid adverts and uh and content marketing okay so that was an agency deal basically when does the sas come in yeah we started as an agency as an agency deal there was no such uh society at that point and basically what happened we we started to build the system because obviously it was a small agency we just started and we we had to build the system to actually cover this we talked about 150 locations 300 pages so we started to do research finding these uh the software solution we can help us to actually run these these pages and we couldn't find anything and what year was this this is 2016 2000 at beginning of 2017. okay and how much revenue do you do in total in 2017 i was it was something like 15k in 2017. so what happened to the million dollar contract that's the thing yeah so basically what what happened we started to work with this uh in this project we got the first contract we signed that started to pay uh this uh the start of the project and um in the meantime we realized that okay so and living and using your thermology and this is our golden goose we got a big company we need to build a company behind it and we need to build ourselves up but what happened we realized there is no tool really so we we just find out that there is a there is a pickaxe there or we can build and that's the sas project so we started to focus on the sas project and building the this this actual content management tool um focusing on that one particle company but then what happened was brexit and many regulations for that business and they they just stopped the contract so how much revenue did you do last year on the sat or sorry last month on the sas business the last month last month the last one for the last month was three and a half k three thousand five hundred and how many customers you're talking about february sorry february three hours is march well that's a good news then because we just hit it 10k nathan we are quiet quite happy at the moment the last month was one of the best months for the sas for us and we just heated 10k so how did you go from three thousand five hundred dollars per month in january to ten thousand dollars per month last month in february at the last month in february we actually start the system what we built now especially sales and the connections start to work out and we landed four big clients that's it and it's it's basically uh package and uh sas combined together how many customers are you working with today total we got 98 customers at the moment 98 customers this is great and who is we what's your team look like so um i got my business partner best friend that's uh that's numbers he's acting as a cto at the moment in the company an amazing talented guy and then we got uh four full-time employees in the business one part-time employee in the business and on contract we got our development team and couple of support team that's nine people in total how many engineers total uh that's free engineers and do support for the engineers project management any marketing or sales reps well that's us got it that's the two of you guys company yeah so we do have yes you don't have sales i'm the one running the sales in the business at the moment i see so where are you finding these customers you have 98 of them where'd you find them so the first the first customers we actually did a tryout it was the beta phase of the software uh what we did and then instead of there is a model you know the lifetime model and then instead of just running a really cheap lifetime model we decided that we'll try out our pricing structure and and the value of the software so we built it a 300 dollar package what is a lifetime offer but for 300 dollars and we sold that to our networking so we got quite a few connections in our our obviously we got some clients from the past we got our networking uh clients as well and we use social media to do that the new customers who we will be acquiring is all organic social media but just to be clear that 98 customers paying today those are ones actually paying per month not ones that paid one time for lifetime access no there are there are 35 companies who paid one time and the upsell into them services and then everyone else is paid by month yes goddess you've got about 60 that are paying monthly 35 paid 300 one time and got you about ten thousand dollars of one-time revenue yeah why did you do that well as i said we needed to see that what is the value behind the structure we're building inside the software the unique static point of the software is a a special template and we decided that the beta phase of the software the testing will be better if you actually got real clients or i didn't wanted to go in the room to do the free uh free accounts so we actually did this and this is why we we went with uh i don't mind i i don't mind it so that that brings in ten thousand dollars worth of cash it gives you a little bit extra runway now you're focused on selling month-to-month plans yes that's that's correct that's great well it really we officially launched the software in february so last february when the covet started and that was a huge hit and it really really didn't work out for us because our main niche was restaurants casinos and hotels so it was it was a disaster for for the software and for ourselves as well so what we did uh we reverted our strategy for focusing on franchises and multi-side businesses and that took us about four months delivered for our marketing materials and everything and that's why we relaunched us in october so really we started in october and have you bootstrapped or raised capital we got some capital um mostly like uh mostly um really good loans and we sold about we got 35 000 pounds from like friends and and one particle client we invested in based on seven million dollar uh valuation seven million dollar evaluation yes that's a big valuation for no revenue that is a story behind this so what's happened we actually um back in 2019 we started to talk with some angels and we talked about thinking some invest investment into inside the business and we couldn't find any angel anyone who fit into our business and we just decided that we will go something but i never really heard on your channels crowdfunding so there is a platform called cedars and we decided that we'll go with cedars so can you tell us s-s-e-e-d-r-s dot-com yep okay so you raised money you raised money there then nobody did sorry you raised you raised forty thousand there at a seven million valuation uh yes that but it was not on cedar so what's happened let me just quickly uh run to you so what happened we went for cedars we we built it together the project they they approved our our application uh they approved the valuation and then how it works you start to collect uh like investors behind the project you you you try to get in your own investors to start the project and we did that so if you build a quite big um um follower base and and people who want to invest into the business and then before we launched the actual campaign coveted and we just stopped the campaign and we got a couple of really really good investors who then decided to stay with us and that's what happened but how are you able to convince him to give you money at a 7 million valuation i mean that's nothing well we really built we really built a really nice business plan and then um it was a proof of proof of concept that we got some franchisees we got the clients already in talk and and they actually managed to achieve it i mean i mean basically if they put in 50 grand at a 7 million valuation they're buying less than one percent of the company uh they're betting on the fact that you're able to grow this thing to sell for something for more than seven million dollars otherwise they never make any money that's correct so i mean if you gotta offer right now to sell the whole business for four million dollars all cash up front would you sell no why not because we see the potential we're seeing the the actual market value of our software and it's just not in the station i would say we just don't but potential is very different than a four million dollar cash offer right now all up front today that's that's true but we already got clients it's a proof of concept we've got some big big uh franchises and multilocation companies join us now and we're seeing the numbers and they are really promising if even if i just check the last five months since we actually recovery from from coffee our our revenue is now higher than it was the last year all year no i think the growth is great i just think the cap table is crazy 50 i mean 7 million valuation means you can't raise capital unless you raise a higher than 7 million valuation otherwise it's a negative signal to the market it's a down round i just think you you actually really hurt yourself by having such a high valuation so early well i think we don't may not really want to raise at the moment so we will grow the business and we will see how how it goes well i don't think you'd be able to raise right now because you'd have to convince someone else that you're worth more than seven million bucks which i think would be a really tough sale at 180 thousand dollars in mr nar what do you think you'll grow this year uh we will definitely double the revenue for last year but i think it will be probably about half a million so you think you're going to go from 10 mil 10 000 a month right now to about 50 000 a month by the end of the year yes definitely i think we will hit 20 000. 20 000 by end of next month or this month sorry march and where is all that grow i mean you're doubling month over month is what you're telling me where is all that growth coming from well because quite a few prospects now at the moment we be part of a big franchise organization called the qfa and we got a lot of clients from that and and we got a really nice model and they're loving it so what we but i think what generating the growth now and what actually we achieved is that the system the selling system will be now building for franchisees so franchise companies are using our tool our software but also using our our our services and what we do now it's a franchisor agreeing with us and this is proven now and we got because new clients doing this they're actually using our service to grow and get onboarding franchisees and then we in building our product inside the franchisee offer so therefore we gain a new contract from everything sure but what kick what kickback are you paying the franchise owner sorry what how are you what are you paying the franchise owner to sell your product you're not selling no no we we providing service for the franchise owner we don't pay they paying for us to run paid adverts and using the tool okay got it sorry i thought you just said the franchise owner is selling through like a value-added reseller your product it's just it's just part of the agreement that it's basically giving them a package whenever they onboarding a franchisee we be giving service and the software for franchisees as well so we're growing together with the franchise i see very good we're rooting for you let's wrap up here with the famous five number one favorite business book i would i would say i really like your book i really enjoyed it already oh nice you got a chance to read it i'm actually really standing now and now the audiobook at the moment but getting things done from david allen is really really important for me number two is there a ceo you're following or studying there are quite a few now with clubhouse started so you can get this really good interaction with them but elon musk is one of my favorite ceos number three what's your favorite online tool for building the business it's zoho actually we're using zoho for a lot of things number four how many hours of sleep are you getting every night well it's about four and a half hours and what's your situation married single kids well i'm married and i got three boys two-year-olds so and how are you i'm 41. 41 last question what's something you wish you knew when you were 20 andres well i'm i'm pretty sure that i know the answer so when i was 20 i already run two businesses and one thing what i missed is building and document systems what i did i did everything from insects and i really wish i could build a system where they i can replicate in new businesses so i don't need to redo everything from the beginning and that's what i'm doing now guys smd.com almost doubling month over month uh helping customers uh manage and understand their social media they're now doing ten thousand dollars a month in revenue hoping to do twenty thousand dollars a month by the end of this month again rapid growth rate they raised fifty thousand dollars at a seven million dollar valuation early on now fighting like heck to grow fast enough to grow into evaluation we're rooting for them 68 customers right now that are paying monthly another 30 that paid one time nine people on the team three engineers andras thanks for taking us to the top thank you very much nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas world whether it's an acquisition a 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 sas 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 can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 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 but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya