Storybook App Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Francisco Cornejo. He's the husband and father of two boys. His family is his greatest treasure and his greatest project. He's building now a company called storybookapp.com to help parents make their kids fall asleep. Francisco, are you ready to take us to the top? [00:15] >> Let's do it. [00:16] Okay. So what's the model here? Are you selling directly to moms and dads, or is there a b to b play? [00:21] >> Yeah. Storybook is a b to c, a consumer subscription based app. It's free to download, seven days trial, and then you have a subscription to have all the content of the app. [00:33] Okay. Interesting. And when did you guys get when did you launch sort of the first line of code for the application? [00:38] >> So the the MVP, we released it in mid twenty eighteen. [00:43] 2018. [00:44] >> But the but the fast growth, we saw it since January 2020. [00:51] January 2020. [00:52] >> She was one of the main users. [00:54] Little ones. I love that. And so how much do parents pay on average per month to use it? [01:00] >> We have yearly plans. So the yearly plan the yearly price in The US is 89.99. [01:06] Okay. So $90. And when did you get your first customer? What year? [01:10] >> We well, the day we launched. We started with a pay per download business model back then. Probably the wrong decision, but was great to test our hypothesis. There are people willing to pay for this even without looking at the app. And the reviews were great. So on day one, we sold 300 apps. That was really exciting and told us we are on the right track. [01:32] And so how much revenue did you do that first year? [01:35] >> The first year, we did around 90 k. The second year, we did around a 100 k. Wasn't much difference. The next year, we did 400 k. [01:46] So Oh, wow. [01:47] >> There's there's when we started to grow really fast. [01:50] And so that would have been 2020. Right? [01:53] >> Yep. [01:54] So in 2020, you did 400 k. How much will you do this year? [01:58] >> The plan is to get there with 700 k. [02:01] And And what what do have today? [02:02] >> Pushing to grow. We're right now are really, really busy working on the product. So we're looking in the long term of the business. [02:10] How much total, though, this year have you already done? [02:13] >> We're already past 500 close to 600,000. [02:16] Okay. So you need about 120,000 of sales in the next sixty days to break your goal. [02:20] >> Yeah. We'll we'll get there. [02:22] That's awesome. Okay. And how are you finding these customers? What's your growth strategy? [02:27] >> So we've been relying on paid acquisition since we started Facebook and Instagram mostly. Now, we are seeing a big potential in partnerships and, of course, organic, which takes a long time to build. Now, we are seeing the the benefits of it. [02:44] Francisco, how much did you spend on Facebook and Instagram ads last month? [02:50] >> Last month wasn't a typical month, but we are spending around 40 k, 50 k. [02:56] Per month. And so how much do you know you can like, what does it cost you to get a new $90 download? [03:02] >> Depending on the country. So right now, for example, the pricing in Brazil, we are testing monthly plans, which is something we have nowhere in the in the world. In Latin America, the price is $50. In The UK, the price is £50. In The US, it's $89. So the average CAC cost per acquired subscriber, it's around 40 to $60 depending on the country. [03:29] Okay. So $50. Like, in The US, you might spend $50 to get a $90 download. So you're profitable, you know well, you're profitable instantly because they pay it all upfront. Right? [03:38] >> Yeah. Well, we aim to to do that. We aim to to have a higher ARPU than our CAC. So, the renewals come as an addition. [03:48] But it's all annual. So, even if your ARPU, average revenue per user I per month is mean, you're getting it all right back immediately. Now, have you raised capital here? Have you bootstrapped? [03:57] >> Yeah. We raised our pre seed round last year. We're lucky enough to crossroads with Jason Calacanis, amazing angel investor, probably one of the top five in The US, not the top three, at least. And he also was an early investor in calendly.com. And he fell in love with the business model because he knows about the subscription apps and how massive they can grow. But he also understood the need of helping parents to get their kids to [04:32] >> sleep because of a personal experience. It was [04:34] So, a great how much did you raise around last year? [04:37] >> So, it was around 1,000,000. [04:39] 1,000,000. Okay. Got it. And what sort of cap or valuation did you raise that at? [04:45] >> We raised at 8,000,000. [04:47] Okay. Did that feel fair to you? Like looking back, was that the right call? [04:51] >> Yeah. Yeah. I think the potential was there. The numbers show that the the investors are happy and we're looking to raise more. So, yeah, I think it was You [05:02] only raised 1,000,000 today then? [05:04] >> Yeah. [05:05] Okay. That's great. How much are you looking to raise now? [05:08] >> We're still undecided on the on the figure. [05:10] Yeah. What do you think it'll be? Do you have a range? [05:14] >> We're aiming to to get to our series a next year. So we should be looking at, it could be anything from 5 to 7,000,000. [05:23] Mhmm. And if you raise 5,000,000, well, what do you think you'd spend that money on? Is it mostly CAC? [05:29] >> Well, it's gonna be growth, massive growth. Right now, we have been really focused on the product. So if you compare storybook from what it was a year ago and what it is now, we tripled our metrics in retention, in monthly active users, in weekly What is MAU? Content by a lot. So, we look at or MAU, the only thing that we care is people who are actually completing the stories, not looking at the app, not starting [05:58] >> a story, but the ones who are completing stories. And it's around 30 k. [06:04] 30,000 monthly active users today? [06:06] >> Yep. [06:07] And what was it a year ago? [06:09] >> A year ago was December last year was around 8,000. [06:15] Around eight. Okay. Yeah. So this is great growth. How many customers will download the app this year? Or how many, I guess, are on the monthly or the annual recurring plans now today? [06:27] >> So right now, we have 10,000 paying subscribers, active paying subscribers. [06:33] 10,000 paid. So when you say active paying subscribers, does active mean they're part of that MAU number? [06:39] >> Yep. [06:40] So I guess if you have 10,000 customers, how can you have 30,000 monthly active users, like triple the amount of your paid customers? Are there a bunch of free users in there? [06:51] >> Yep. [06:52] Oh, I see. Got it. [06:53] >> But, yeah, it's a freemium model, so you can use the app for free. But if you want to to get access to all the content, you need to pay for a subscription. [07:01] I see. So 10,000 paid on the annual plans. How many total downloads does the app have all time? [07:06] >> All time. We are a little past 1,500,000. [07:11] Okay. 1,500,000. So you've converted 10,000 of those into paid? [07:15] >> Yeah. Well, remember that the business model changed. But, yeah, ultimately, that's that's what it is. [07:21] Yep. Yep. Interesting. Any other product lines? I mean, can you sell anything else, these 10,000 customers to increase ARPU? [07:27] >> Yeah. Of course. Many things. But the focus right now is to make a storybook the best product it can be so we can launch for a more aggressive growth. And instead of focusing to get more money out of this 10,000, we want to get to a million subscribers, 2,000,000 subscribers. And along the way, we will be launching additional things, premium content, physical products. We have a few things down the line, but I don't want to spoil [07:54] >> the surprises. [07:55] That's fair. Who is we? Who's how many people on the team today? [07:58] >> We are 20. [07:59] 20 people. And are you the sole founder? [08:02] >> No. Actually, my co founder, she's the brains and heart and soul of the product. She's the one who came up with the idea and who writes the stories and creates a content for storybook. [08:13] Is she your wife? [08:14] >> Yep. [08:17] All right. So you guys are co founders. You split it fifty fifty at the start? [08:21] >> Yep. [08:22] Very cool. You didn't give her a little more, let her have 51%, you take 49%? [08:26] >> She deserves that. She deserves everything. Absolutely. [08:29] That's amazing. Okay. So you guys split fifty fifty. You sold 10% to angel investors. So it's like sort of like like forty forty ten or forty five forty five ten, something like that right now. [08:38] >> Yeah. Well, yes. They they were safe. So not equity as as of now. [08:42] Yeah. Yeah. Yeah. But but but when they convert, it'll be somewhere around there. I assume you're planning to raise it higher than the cap on the note, 8,000,000. [08:49] >> Of course. [08:49] Yeah. Very cool. All right. So 20 folks on the team today. How many are engineers? [08:56] >> Our engineering team is five people. [08:59] Five people. Okay. And what do the rest do? [09:02] >> So the growth team and the product team take our bulk. We are 16 people full time and four people half time scattered across the world. We have people in Spain, Colombia and Argentina, Ecuador, one person in Australia. But the rest of the team is the product team and the growth team. [09:26] Of the $700,000 in revenue you'll do this year, do have to give 30% of that back to Apple? [09:30] >> No. There's a couple of things. We also sell directly to our website. But most interestingly, [09:40] >> both Apple and Google now have a 15% commission if you are selling less than 1,000,000 a year. So they don't they take 15% fee. [09:50] I see. [09:51] >> So we're making the most of that. Next year, we won't be able to do that. See. Well, it's fast. [09:56] Can you just launch a version two that starts from zero and just keep that under 1,000,000 [10:01] >> I'm guess I'm guessing you can, but you will be losing on all the rankings and all the history of the app. [10:08] Yeah. Very interesting. Okay. Got it. So that makes a lot of sense to me. You mentioned partnerships. Name a partner that you'd love to that you think could drive you a lot of customers. [10:18] >> I don't want to jinx it, but we have been working with really interesting companies in Latin America. We're talking with a company in The US and we're about to close a deal with a consumer, very big player in the baby product space that we aim it's gonna give us at least a million new downloads in the first thirty days. [10:43] Very cool. [10:44] >> So, yeah. Don't want to just [10:45] We're rooting for you. Let's wrap up though now with the famous five, Francisco. Number one, favorite book. [10:51] >> Wow. [10:53] >> That's a hard one. [10:58] >> I don't know. The most recent I read was working backwards. [11:02] Number two, is there a CEO you're following or studying? [11:11] >> Not really. [11:12] Number three, what's your favorite online tool for building storybook? [11:19] >> As of lately, I'm a big fan of Notion. I don't know if I can replace that. [11:24] Number four, how many hours of sleep do you get every night? [11:27] >> Between four and five. [11:29] And what's your situate well, we actually we know you're married. How many kids? [11:33] >> Two. [11:34] Two kiddos. And how old are you? [11:35] >> I'm 34. [11:37] >> 34. [11:38] Last question, Francisco. What's something you wish you knew when you were 20? [11:42] >> Tech startup world. [11:45] Alright, guys. There you have it. Storybook app launched in 2018. They did, call it $90,000 in revenue. In 2020, they broke 400,000 in revenue. This year breaks $700,000 in revenue, 1,500,000 total downloads of which 10,000 have converted to a paid plan. It's parents who want to help their kids go to sleep faster. Quality time right as they're falling asleep. They raised $1,000,000 at a $8,000,000 cap. Looking to raise maybe a 5 to $10,000,000 series a here [12:08] soon. We'll see what happens. Francisco, thanks for taking us to the top. [12:11] >> Nathan, pleasure. Thanks so much. [12:14] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. 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