Stateofplace Revenue & Funding (2024)

hello there everybody my guest today is mariella alfonso she is bridging academic academia and practice founder and ceo of state of place she's an internationally renowned expert on urban design behavior and the triple bottom line she's a fulbright scholar urban land institutes 40 under 40 best young land use professionals and a research assistant professor at new york university mariella are you ready to take us to the top absolutely okay so tell us about stateofplace.co that's what you're building right now what's the company great state of place is an urban design database and predictive analytics software um so we help city makers make the investment case for creating better places while identifying the best ways to maximize walkability livability sustainability and return on investment okay very good and help me understand how you price this do you sell directly to the city or the town of the government or someone else um we sell both directly to cities and real estate developers using a typical sas subscription model although we're transitioning to a data as a service model because we're automating our data collection process okay and marielle are you a killer how much do you get him to pay per month on average um on average we know we start out our engagements at a minimum of 12 500 um on a yearly basis um but it can go up to 50 000 um you know we we also charge additional for additional up upsells like reporting features um we're also expanding our forecasting models right now we see how how increasing urban design facilitates higher economic growth but we're also looking at um how that impacts safety and collision rates environmental um outcomes so as you add on more forecasting models there's upsell opportunities there so what do you what would you say the averages acv a grand a month or something like that um the yeah the average will what we're targeting is about two two to three thousand dollars a month but what's sorry not what you're targeting like if you actually look at historical average it's what would you say um you know it it honestly varies quite a bit because um our customers are now doing all sorts of project-based approaches to try out state of place more like on a pilot basis usually for a minimum of three months so we what we've done more so like what what is what what what have we done on an annual basis like last year we did about a hundred and twenty thousand dollars so if you can give or take that's about ten thousand dollars on a on a monthly basis yep you mean total revenue last year was about 120 yes and and what are you at today like what'd you do last month um again last month um our our customers pay it's a little bit of tricky with cities because they like to pay at the beginning of our contract and at the end of our contract so mrr is not quite consistent well if the contract is 12 months you just take the contract value divided by 12. yeah um so i mean we have we haven't closed any particular cities um in the first month of this quarter yet so it's hard to say okay so you're still doing about ten thousand dollars a month which would be 120 grand a year on average yeah well for this year we're we're projecting out to increase that to 800 thousand dollars this year okay but projections are easy a lot of us are good with excel um i'm trying to understand just what you have done from a performance perspective so it sounds like if you did 120 grand last year total in 2018. what did you start the year at do you remember were you doing like two three four grand a month something like that you know it's just really difficult to to quantify our particular company this way just because we're not you know we're still much in very very early stages so we're you can't really calculate mrr yet from from our perspective right so is that because it's really you're more like an agency i mean is there project based not subscription right not true recurring subscription revenue well we're right and we just have our we've had all of our customers basically have bought on one subscription and they're still on that same subscription so we haven't yet had them at the opportunity to um renew that subscription right because they're they're focusing on because we're mostly focusing on cities they are buying our our product our software for one project of time they they take a while to finish that project and then now they're they're looking at okay once they're done with that project then they so what do they pay per project um again it sort of depends on on the city or the developer but it can go from a minimum of you know 12 500 up to we've had we've had one uh customer who paid you 90 000 for for one engagement right oh wow so if you did 120 grand last year you're saying one customer made up 90 grand of that no not at this particular customer this particular customer paid over three years it was a 90 000 subscription for a three year subscription okay when did you launch the company what year um 2016 it became a pro it became a software company okay so 2016 and then how many customers have you scaled to today which means they're currently paying you and working on a project so right now the our current customer base um includes nine different cities okay nine different cities so i mean if i take nine cities and they're paying caught 12 grand per project right that that's 108 000 there and kind of sales now what you're saying is we recognize that over all kinds of periods of time because a project length is different but am i understanding you correctly yes you are okay the con if someone signs up today on a three-year plan and it's 90 for 90 grand do they pay the 90 grand up front or they pay monthly or each year for for on uh if they're doing that long of a subscription no they're gonna they're gonna be paying um every year um half up front and half uh towards the end of the year so it's 30 grand a year for three years 15 grand at the start 15 grand at the end kind of thing right interesting and tell me more like the makeup of this thing so you're like you're a professor it sounds like architect backer by the way i was architecture at virginia tech before i dropped out and got into software so potentially we share that but what's your background why'd you launch this in 2016 um that's a great question my background is in urban design and behavior i look at how the built environment influences our choices to walk and how that creates value across the triple bottom line i started this because i grew up in miami and growing and crossing the street was absolutely terrifying and i understood that there was a better way to design cities and i felt that the best way to advocate for cities was to not just say hey we could do better but show them why we should do better why urban design values is valuable and then in order to do that i needed to quantify what urban design was so i started from this from an academic standpoint i started as a consultant in 2005. i tied state of place what it is now to economic value out of a booking study that was published in 2012 and that's where the idea for state of place uh first came to light and so i turned my consulting company into providing this as a product and then was able to get a grant from the national science foundation through their small business innovation research uh grant program much um 150 000. is that the only capital in the company have you raised additional capital we raised additional capital we had um 150 000 from an accelerator program called catapult at the beginning of this past year and then we started our our first seed round um with the first uh checks we got uh in the in the summer um for 145 000 uh total so you've raised about three hundred thousand dollars to date and equity and another hundred fifty thousand dollar grant correct okay that's great so three hundred thousand books right and what's the team size look like today how many folks so there's four of us full time um there's myself our ceo cto um and we have a visual machine learning specialist and where is everyone based kind of remote we are a remote distributed team entirely i'm based in shanghai split time between there and boston we have our ceo's detroit cto's in um oslo also in oakland and our visual machine learning is in oakland then we have a variety of other part-time interns all over the globe great so four people full-time remote 300 grand you've raised now are you burning capital today are you casual positive uh i would say not yet cash flow positive okay how aggressive are you being like you're talking burning like 20 grand a month or 200 grand a month or 15k a month is our runway right now yeah and that's right that's how much that's how much gross we we spend per month just so just be clear your bank account is going down by 15 dollars every month [Music] um or fifteen thousand is your total expenses it's total expenses got it so does your revenue more than make up for the fifteen thousand in expenses not the entire amount now so that's the debt what's the delta it changes every month because again we're not on average same amount um on average we end up getting probably between three three to five k in um yeah okay so that means you if your total expenses are 15 and you get three to five can that means you're burning your bank is going down by call it 10 grand a month something like that yeah got it and then um so how do you i mean we're certainly hearing from you is like it's kind of a complicated model like it's kind of software as a service but like not really and then there's like project based and there's a lot of handholding and you're flying all over the country wearing yourself or the world wearing yourself out what's the future of this thing is it software or is it project and you're an agency that's a really great question and we're in a transition point right now we are one of the reasons that we have not yet been able to fully gone software as a service is the way that our data is collected it's collected manually using google street view it takes 20 to 25 minutes per block so when we engage a new customer they automatically think project by project because we have to start with geographically constrained area so the last six months have been focused on product development using visual machine learning to automate that process to go for seconds to collect data for an entire city um so that becomes that allows us to become a data as a service provider where we come into a city or or developer and say we have data for your entire city or your entire asset portfolio and that changes the conversation from day one um and that will become the basis of a recurring model moving forward with software to support uh the data that we provide okay we're also uh changing our go to market strategy where we're looking to establish state of place as an international standard for quality urban design that's tied to things like you know climate change um it's tied to environmental quality uh measured quality what's that measured by what uh measured by our forecasting models that tie the state of place index which is the the score that we derive from the data that we collect um to say if you have a higher state of place you have a lower probability of a collision you have lower reduced vehicle miles traveled and greenhouse gas emissions you have a higher probability of well-being and higher product productivity in terms of your employees so basically state of place becomes a benchmark by which you measure value across multiple different areas of value mario on that note let's wrap up with the famous five number one what's your favorite business book [Music] uh i mean lean startup was the classic one that got me into this crazy race number two is there a ceo you're following or studying oh i mean honestly i'm very much inspired by female leaders in my urban planning space like janet sadikon more so than a specific experience what company is she running she she ran the new york department of transportation so i'm more inspired by female leaders in urban design than yeah oh i love that uh good so janet i ran new york department of transportation number three what's your favorite online tool for building your company we love click up right now um it's our project management tool number four how many hours of sleep to get every night five to six hours okay and what's your situation married single kiddos married uh trying for kiddos okay try that good i love that married and do you mind me asking how old you are i just turned 40 a few months ago oh congratulations that's great and last question what do you wish your 20 year old self knew uh that even in the darkest of days there's always there's always the next page there's always an opportunity for like things are going to get better things are going to you know work out fine so be less anxious even in dark times folks that tomorrow is coming be less anxious anxious mariella got into this whole gig in 2016 launching state of place to try and quantify quality of urban design she's got kind of nine customers paying anywhere between 12 and 13 grand per project each year did about 120 grand last year hoping to scale this year and really move to a pure play sas platform 300 thousand dollars raised she's burning her net burn is about 10 grand per month right now so plenty of runway team of four who are really remote it's too early to talk about cac turn art with things like that but she is obviously looking to scale mariella thank you for taking us to the top thank you so much nathan