How Stitchedinsights CEO Dmitriy Pavlov grew Stitchedinsights to $2.7M revenue and 9 customers in 2024.

hey folks my guest today is dmitry pavlov he's the founder and ceo of stitch insights the silicon valley deep learning pioneer and predictive and consumer insights he's a guest speaker and emerging tech trends cross-functional team building and science in marketing do we treat you ready to text the top been ready for a while let's go nice so hey last time we spoke man it was back sort of middle of covid give everyone a quick reminder what are customers paying you for yeah for sure so we're creating ideal experiences for consumer brands and helping them understand how their customers think and feel against their competitors in their entire category and so we're charging uh at a base ten thousand dollars a month per channel things like amazon as a channel or an internal support request channel or like twitter is another channel and so we've been working with predictive innovation teams sustainability teams across luxury groups fashion retailers leading consumer electronics companies and essentially understanding working with their predictive innovation teams and sustainability teams and e-commerce teams helping them really measure at a really granular level what their customers care about at the attribute level of each product versus their competitors so they can actually start measuring what is the size of the opportunity in the entire market for their products for their consumer segments basically is there your segment that's really really happy with a dimension of a product how it's performing or is there a consumer segment that really hates a specific dimension of a product your competitor has that maybe you have a really huge opportunity to to hit on 10k per month per channel is significantly different than i think when we last spoke you had i think nine customers paying on average sort of a grand a month so have you really moved up market intentionally oh yeah we've completely shifted sort of the the kind of the entire go to market strategy what we've realized is basically and before it was really like mrr and really early poc revenue that we had now we have actual arr revenue we're actually nearing um a little over a million arr this coming year um and so what does that mean you mean like you take today this month's revenue times 12. uh no we we actually have some some new engagements coming in so we have a little less than 10 customers at this point basically we have now engagements that are annual contracts as opposed to um just a month by month or a poc just non-recurring revenue contracts and so you've switched years completely and kind of how we're we're monetizing this a little bit well so help me understand so you use in 2020 you said you had nine customers so you still have nine customers to say but they're different customers and paying you way more is that right we were running pocs in 2020 with with a number of folks like sephora's of the world um trying to understand basically what we are deploying and what we are solving for them and what we realized is really where the real pain point is across all these brands is they're running surveys on all of their customers but what they're not doing is they're not serving all of their competitors customers at that same scale so when they make product changes or estimate market opportunity they're really only uh estimating in a bubble in a vacuum they're estimating what they're doing what we realized is by actually looking at the external data we can actually measure the size of the opportunities for these brands and what we found is who specifically is using these insights so what we were initially doing is just exploring with you know so a year ago those nine were not customers they were they were pilots and so now today you have nine fully onboarded paying customers and it's true arr we've lived under 10 we'll have over 10 fully true ar customers by early this coming year yeah four for annual agreements i see icic so so what when you just look at booked revenue today what would you say mrr is uh we're we're sharing arr essentially so we're gearing up for our series a this coming year um in the new year so we're basically our target is a little over uh 1.3 million in are is is basically from our existing contracts and their expansion revenue that's coming in from those contracts when you want to hit 1.3 a year and like an arr yes correct and realize no before q2 of this coming year okay so that so 1.3 and are calculated by you know that month's revenue times 12 forward-looking would mean you need about 110 000 bucks a month in revenue to get 1.3 in a r so you think by q1 of next year before your series a you'll break 110 000 a month in revenue oh for sure for sure yeah and where are you today and and so we're we're on our way to that today we're we're not there yet but we have really really large contracts coming in right now and what we've realized is there's expansion revenue with um with our with our software especially especially where we are sharing these insights with one team like the predictive innovation team i totally i totally get all that like i understand the upside i'm just trying to get a sense of how much you have to grow between now and your series a to hit that mark so so are you not sharing on purpose sort of revenue today or where if not like where are you what's the range yeah so we're actually right in the middle of a fund raise right now of of a small like c plus round so we're not sharing externally those numbers but it's it's well on the way to it uh got it so i mean can we so let's put a big range on it can we say you're above 50 grand a month in revenue right now uh i could do rate well i could tell you that we're under uh we're under 700 000 arr still and you're calculating ar we're taking last month's revenue times 12 right annual recurring yeah it's it's anything that's signed contracted for recurring revenue moving forward from 2020 to 2021 on [Music] got it still a little confusing but we'll move on so we can learn other stuff got it so signing enterprise accounts um you mentioned seed plus does that mean you already raised a c did you raise a seat earlier uh so there's not really a name for this round yeah we raised a small chunk uh the previous year we raised a little over a hundred thousand dollars basically just to help us commercialize some of this platform um and we've used that essentially to to figure out what is this platform that we can start expanding out and that was in 2018 you raised the precede uh that was about a year and a half ago i'm getting lost in what year we're now honestly okay so 110 and sort of an early round and you're closing sort of a seed plus right now how much are you looking to raise right now about 3 million is this is what we're looking at and we already have uh some really really great investors that we're working with right now in in middle middle of the conversation with or so why do you need to raise right now like what what what why do you have to you know have that kind of money to grow yeah so i've actually this past year i've just switched gears from anything other than sales and i've had the opportunity to speak with dozens and dozens of cdos ctos cso cmos ceos across these fortune 100 brands and i've literally spoken with 30 or 40 like 14 100 c-level executives and what i found is that we can actually we can launch this pretty easily because we are offering something really different than than what's in the market we're not looking at sentiment we're not looking at overall what's happening for your overall brand we're understanding each individual dimension what matters and i've been able to get a um so and we have a new subscription process that we go through it's an annual agreement that has a 30-day trial that's attached to an annual agreement already and so because of all these conversations and this easy piloting process i've actually created a pipeline of way too many way too many active engagements basically that i'm realizing we can hit all these if we have additional revenue if we have additional funding why why can't you just go close them now and you get them to pay up front and use that money to drive growth so we we will potentially do that starting starting next year is to leverage the money up front um the easiest way has been to say you know we give you like for ten thousand dollars we'll give you a snapshot analysis of your of one of your products against the competitive category set and then at that at the end of that month it turns on into a 10 000 a month subscription and then we start expanding to additional channels so that process to get to get paid like large amounts from these brands is a longer process so right now we're still we're not getting enough revenue in to catch essentially all the opportunities that are coming in so we're trying to accelerate this on the three million now what valuation are you targeting yeah so that's also we're not sharing that exactly we raised under four million dollar valuation previously um and we're up up ahead of that now basically uh how much i guess what's a range of how much percent of the company do you think you'll have to sell to raise three million we're trying like 10 to 20 the standard stuff 10 to 20 percent uh probably less than that uh we're so one of the one of the investors is with the spv um and they're actually like a very very very friendly terms so far um you're looking at debt you're looking at debt or equity i'm safe we're looking at a safe okay as you said the the one of the partners is that svb spv like a special purpose vehicle that oh spv i think i said silicon valley bank got it uh okay so...