Storeautomatorrevenue & funding

hello everyone my guest today is gokon arkovan he is the has 15 years of experience in e-commerce together with a team of top software engineers to create the foundation for store automator his current company with years of continuing development he's built the best multi-channel listing catalog and order management software for brands retailers and brand agencies store automator helps its clients not only to manage but also grow in the ever-changing ecosystem of e-commerce go on you ready to take us to the top yes yes all right so in the bio you sent me you said built the best multi-channel listing so how do you measure the best uh so i have experience in e-commerce more than 15 years i started e-commerce as a retailer and all these years e-commerce evolved to something uh from uh just one channel selling to multi-channel selling becoming must for retailers to survive and grow in this retail environment so all these years i try different tools uh i come to a point that none of the tools is the great way to manage my multi-channel retail business and at some point we decided decided to uh develop these tools that first used by our company uh in a daily basis and then after a while when it will become in a position that it can be commercially available for other companies uh we decided to uh make it available uh as a software and continue to develop it what year was that uh this was in 2015 okay so you launch in 2015 and then help me understand how people pay you or are you pure place ass uh yeah vr pew place says uh anybody introduced to our software they can go to our site sign up and in a minute or so their account gonna be active and they they can start to be trying and using the software for their business they can connect different channels and what do they pay go on average per month or per year to use your technology um you know we have anywhere from 50 to 2000 dollar customers and i will say per year per month okay what's the average so average i will say 700 dollars okay very good unless you you know paying awesome so launched in 2015 uh obviously scaling how many customers are you now serving today currently we have over 500 customers but last i will say two half months we start to be growing exponentially and the reason is of course uh the market have to be aware of our software and that happens i would say uh sometime 18 months ago and last 12 months was great for us actually okay so if you have 500 customers paying 100 bucks per month on average that's 50 000 per month in revenue where were you exactly a year ago do you remember i would say maybe somewhere maybe 10 000 i will say okay and how did you get those first 500 customers do you remember so we have a marketing team that working different ways um you know we have views we are using the linkedin sales navigator uh we do a lot of uh advertising in twitter uh we also don't tell let's break these down so linkedin sales navigator what kind of job titles are you searching for how are you finding prospects uh so we are targeting small to medium-sized businesses uh that have uh e-commerce presence and they want to be growing their business but how do you actually measure that so on linkedin sales navigator you can't click a button that says small business e-commerce brand so what are you actually searching by what's the team size less than uh steam size less than 50 i would say maybe 100 you know that part uh it's i'm involved but not 100 percent so we have a marketing uh person that you know uh design all that campaigns uh but when we have the conversation uh because our software is targeting the small to medium-sized businesses we target less than 100 okay so less than 100 and how do you know if they're an e-commerce brand or not uh we have to check actually by going to their website and see what they are doing where they are selling okay yeah but how do you get this i mean if you go on linkedin and search for every team less than 100 you're going to get millions of responses you can't go to every million websites figure out what's e-commerce that's correct there are some other criterias our marketing vice president use to find this uh okay you don't know them uh so for example we're looking for either owner is the title or we are looking for a managing director or a managing partner as the title usually the decision makers in the small to medium-sized businesses either the partners directors or the owners uh in addition to that we also looking for titles like the e-commerce manager or vice president technology and from there we filter out a smaller group and then we curate them by checking their website and see what their online presence is about very good so you're doing that and twitter ads so what are you spending on twitter to get a new paying customer so i will say um you know a successful conversion cost us between uh you know 50 to 100 dollars uh but uh you know to get a new lead or paying customer um you know i would say the conversion so a customer that pay us in a monthly basis okay so i mean if that's working and they're paying 100 per month your payback is instant why have you not put you know why eventually raised a billion dollars and put a billion dollars on twitter ads if the economics work uh i would say you know living um you know bootstrapping until now uh we have a uh recently uh you know angel investor come up but we still have short you know in terms of our marketing budgets and we're looking to expand uh by spending more for advertising my point is here is why haven't you so what what i think probably is actually happening is you can't keep spending 100 bucks on twitter to get a new customer if you felt 100 confident that metric you'd put millions of dollars in that channel so what i'm trying to ask you is for you to be self-aware and tell me why twitter won't scale infinitely with your business where does it not hold the economic of a hundred dollars and a hundred dollars out in month one yeah that's a very good question uh i think i have to check with my uh okay marketing fair enough fair enough so how much you mentioned an angel investor how much have you raised uh currently we raised uh around 180 thousands are you raising right now uh we are looking to raise more uh with the you know next series how much do you want to raise uh you know next raise should be over a million dollar now okay and what valuation do you hope to raise on do you know uh we have a you know listing in the crunch base we have potential uh investors are reaching out to us we have conversation but we didn't find any yet yeah but i mean when you raise a million dollars how much of the company do you want to sell if someone gives you a million bucks are you talking 10 20 30 of the company uh 10 okay ten percent so you're looking to essentially get a nine million dollar pre-money valuation yeah that's cool right okay uh and you're doing call it fifty thousand dollars a month right now so a little less than a million a year well so you know you're doing about six hundred thousand dollars a year right now yeah that's correct okay score but we growing uh i believe in a year or so we will exceed the million dollar uh yearly uh mri yeah that i mean that feels reasonable you've added 40 thousand dollars in mr over the past 12 months uh it seems totally you know predictable to say you're going to add another 20 or 30 in the next 12 months what's your team size like today how many people uh we have 12 in our team that include our development and marketing team but you know in some cases we work with agencies you know you know parts that we need help so i will not count them as a par part of our team but to our people i will say and are you burning capital today are you castle positive uh we are breaking i will say okay break even and um what's your churn look like our turn is pretty low the reason is our onboarding kind of take time and once our customers understand the value uh and with all this integration that they built on our system our churn rate is less than two percent per month uh per per year okay well so if i take if you had 100 customers exactly a year ago you're saying you'll only lose two so to go down to 98 customers yeah that's correct okay um are you positive about that number uh i will i will check but archer rate is really really low uh i will check that how do you measure your turn uh so a customer sign up and uh they've been using our software a year and they didn't uh you know unsubscribe that is the way we we measure the trend rate so if 100 customers sign up today and start paying at the end of this month how many will still be paying 30 days later um i will say still 100 maybe one of them sign you know unsubscribe next month okay that's fine now do you have any upsells where you upsell based off number of seats or product features that's driving expansion revenue in your business or no um we are working on a a repricing module which will be part of our ai based repricing module which we are be launching in the coming months and that is what we are planning to do some up sale with this new future do you only have the sas stream right now or do you also allow people to process money or add dollars through you and you take a percentage of ad spend or or e-commerce sales um no i mean our software is per channel per sku and per orders so we don't take the percentage of sales as long as you know the the customer has certain number of skus or orders or channels so we take the same kind of subscription money every month yeah so 250 bucks a month is three channels 3k products or 3 000 orders per month for 250 bucks a month yeah that's correct and you know they make like you know they sell like high ticket items and make ten thousand dollars per order or they sell uh a low ticket items and only make like hundred dollars per order uh we get the same type of subscription would you sell the company today for three million dollars no not even i see a little i see a little a little baby behind you yeah imagine would be like sitting at the dinner table saying guys i just turned down three million dollars i believe there is still a big room to grow for us uh and it is not the right time right now uh for us to exit so we will wait uh until then are you built on stripe uh yes that's correct interesting okay let's wrap up with the famous five number one what's your favorite business book [Music] um steve jobs uh you know from isaacson number two is there a ceo you're following or studying um i am following actually uh bill gates uh and you know uh as a person it's really a great you know uh uh great human being that you know changed the world also you know he's a uh you know a great person that donating all this money that he has great number three what's your favorite online tool for building your company um um i will say um vagueness uh we use that uh wake weakness uh v-e-g and a-c-e okay very good number four how many hours of sleep to get every night i'll say six and a half and what's your situation married single how many kids i have three euros uh married okay very good and how old are you uh six four and uh sorry how old are you uh how old i am oh okay i am 42. 42. last question what do you wish your 20 year old self knew uh i wish i get into sas business when i was younger not when i was 30. i think that's what you know make me i think about why i didn't start earlier very good all right go con let's wrap up here with uh the sorry those were the great a great famous five there again guys storeautomator.com now working with over 500 brands that pay on average hundred dollars per month doing 50 000 a month in revenue from 10 000 a month just a year ago they raised 180 000 to do this team size of 12. no churn to date spending 100 bucks to get a new 100 a month customer so almost instant payback period in just one month they're looking to do their series they hoping to raise a million dollars on a nine million dollar pre-money valuation here shortly gokan thank you for taking us to the top thank you nathan talk to you bye