How Sorryasaservice CEO Indrek Poldvee grew Sorryasaservice to $244.2K revenue and 11 customers in 2024.

hello everyone my guest today is indrek behold V before started a start-up worked in sales almost for ten years in Estonia lived in India for 12 months and then a Nepal for six months in 2015 he was one of the founders of a company called sorry as a service which we'll focus on today in 2016 he went to startup wise guys accelerated her in Estonia and in Sonia and then in 2016 went to the tech stars London accelerator he sent over seventy thousand gifts to date on behalf of companies you may have heard of his biggest customers are British Telecom DPD UK transferwise along with many others in 2017 he started his own podcast in Estonia indrek are you ready to take us to the top yeah hello and great to be with you guys alright so real quick tell us some of your podcasts then we'll jump into your company so the both castes in Estonian language so unfortunately a lot of people cannot understand it by its name is how come with a goat some it means just start doing something I love that just start doing something so speaking of just start doing something you started sorry as a service tell us what the company does and how do you make money yes so sorry service was founded with four founders and one of the founders was extern service worker and the thing that they saw is like people or companies really don't know how to deal with the company complaints in a really personalized manner everything is automated or everything is we give pouches and gifts and we thought guys that's that change that a little bit and we probably made the software that companies like you mentioned in the beginning DVD and British telco that they can send the personalized gifts by just pushing a button and we provide the software and all the gifts that we are sending are handmade so this is how we differentiate from other gift providers is like we send cookies handwritten notes chocolates and cookies and chocolates they have the first customer name written on them and all the items that mostly we send have also handwritten note with including with it and with your money how do you get paid is it as a service or is it pay-as-you-go or what yeah so it's a SAS model and we we like to work with bigger companies and we also have a small margin the items that we ship out okay there's a two revenue streams okay on this I imagine a SAS model revenue makes you more than the margin model right it's also sometimes actually because the volumes are so high like we are sending like four or five hundred items per day so sometimes it's actually margins are pretty pretty interesting they're interesting okay so what are people paying you on the SAS side of things on average so it depends on the company size if it's a bigger or smaller so right now we are focusing on API integrations that we like to automate as much as possible and it's starting four thousand pounds a month so they say so foul is that is that would you say that's a fair average a thousand pounds a month yeah okay so it depends on the customization also what the customers want right now like because our API can integrate with any web-based CRM and with the DPD UK we have been integrated with Salesforce for example yeah and we can do a lot of custom features there so it's really interesting so a thousand kind of pounds or which is about thirteen hundred United States dollars today that's average reserves pay per month that's just the SAS side of thing then you have the margin side of things as well give us more the back story here's what you do to launch the company in so we got together in 2015 and that we actually our company we were started in a hackathon so all the founders all the four founders that well actually there were seven in the beginning we were in a hackathon we had the idea and none of us knew each other before so all of like pretty much random people and we got the idea and it took about five months after the hackathons when we registered the company and we we had to prove four concept and the proof of concept that we had was pretty much mean Ickes of file and a car that I went just hustling I had actually left my job and I had two job interviews and I why did you why did you leave your job because before the hackathon I I realized I didn't like the job I was doing like I was working in a small company and in housing company and there was a sales guy and I wasn't really good but it was not really exciting how much were you making how much my did you give up when you quit Oh in Estonia I don't know not not much it's average like a thousand thousand two hundred euros a month that's average salary in Estonia god it's about eighteen hundred US dollars so you quit that you're going to job interviews then what so when the job interviews happened after the hackathon and then on job interviews I realized that these jobs that I'm implying they don't get me excited as the stories the service that we did in a weekend yeah we saw the hackathon was 48 hours yeah and in the 48 hours we have we needed to build from idea to do a first MEP and then we actually won the hackathon and we got really really excited about it and so what was what was the total revenue in that first year 2015 out 2015 Oh a couple of hundred euros okay so now I only only only three or three months we launched it was in October 2015 okay buddy it took us it took me to church I had two job interviews which I turned into customers oh that's a cause in the end of Patrol job interview I realized like oh damn this is not very passionate and I told them hey okay I had this job is interesting but I was in a hackathon and let me know what you think of this idea that we're doing and these people who I had the job interview they said okay let's try this guys have it there's your hack to get your first two customers just going through their job portals on their website and then when you're in the interview pitch them on your product and ask for their feedback right yeah all right so would you revenue though would you scale them to in 2016 in total revenue so 2060 we got into the accelerators so again we were all first-time founders we were we got into the start of wise guys we got the first investments and then we got into tech stars we got the second investment and then I think our total revenue in 2016 was a 150 to 200 K that's healthy and how much did you raise to have you raised today in total we only took money from the accelerators we actually didn't take any outside investment so so how much it was funny because 250 total okay yeah total and it was funny because we were in textiles London we had the biggest team but the lowest burn rate yeah what was the things we were we are we are Estonian so we try to make everything quite cheap they were like but with the high quality story we were living in dorms and and we really really looked after our burn rate because our CEO who is really really crazy about that you're one of the founders but you're not the CEO yeah okay I am focused on the sales and what's the team size today team sighs today's eight people eight people and what's burn yeah so burn rate though it's like now it's 20k okay that's net or gross that's gross okay gross got it so so what would net are you breaking even or is your net your net burning so yeah so we are breaking even so so it depends on a month so that that's where the the volume comes into into play where we are when we are shipping more items then we get the break-even if we send less items then we are so so got it so your total expenses in a given month it's about 20 grand right depending on what your sales are we'll determine if you're kind of break even at month and a lot of that comes down to volume and the margin you make exactly exactly interesting and how many customers are you serving today so right now the we are focusing on enterprise customers so the problem with them is the sales occurs quite quite long months how many are you working with today they we have eleven customers eleven and how do you deal with I mean imagine gift-giving can be very seasonal or cyclical how do you do how do you try and sell these people a monthly recurring product when they'll say and requi only want to use this during the holiday season and then we want to turn it off so the thing is what what we try is that's why we're making the software is we want this to be continuously poor exceptionally hour now I know that our company story is a service which is short for sauce and it's a panel of that but most half of the gifts that we are sending is loyalty thank you for example if if you're a bank and the customer takes the first loan then we automatically send them a gift thank you for trusting us with a handwritten note for taking this first loan or or right now DPD is using us when something goes wrong or British Telecom sends like when the customer buys for example extending the contract for another two years of their cable service they send thank-you flowers thank you for trusting us thank you for doing this and this is a huge huge model and there are so many people you need to thank and you need to keep your customers happy and it's not like you're sending a customer regular customer regular t-shirt or something that is not customized it was personal so what's the genius the challenge I mean why aren't...