Styla Revenue & Funding (2024)

hello everyone my guest today is franz riedel he's the co-founder of style and agile content management system the tool automates design and unifies content ecommerce to create seamless inspiration and shopping experiences today the company works with more than 100 brands and retailers such as foot locker auto group thomas sabo or obi all right friends you ready to take us to the top absolutely let's go all right tell us about the company uh and what your revenue model is are you pure play sas yes pure place that well we have a very very small uh portion of of uh professional services but it's 97 uh sas technologies that's revenue yeah okay and tell me what people are paying you people are paying me to use our well what has now become a content management system really we started out as a software you could say a tool to to to write content blog storytelling this this this sort of thing and the idea behind it was always to to um have the design automated in a way just because we saw and like when we when we first started that was years ago we saw different device sizes coming out um people needing more content or different device they needed more regular more frequent updates than than than back in the old days and we we thought to ourselves it's not possible to do this to arrange all this by hand use photoshop cut every graphic to the right to the right size when you want to use it elsewhere on another device another channel you have to touch it over and over again that doesn't seem efficient so we want to wanted to use the the machine to actually do the layout based on calculating calculation based on intelligence interesting okay so when people are paying you give me give me a kind of average what are they paying you per month [Music] um average let's say three thousand so it ranges from from around a thousand to now with our latest product uh uh line that we launched up to twenty five thousand a month a month so that's a pretty huge range um yeah on an average three thousand okay very good and put this on a timeline for me when did you launch [Music] ah we launched well we founded the company back in 2012 as a b2c model so it was originally designed to where the idea was to create a community where everybody could blog in sort of a visual way even if you might not have photoshop skills or might not might be a designer somebody skill that layout and so that was the original idea and then at some point more and more companies approached us we got in touch with them somehow and they all told us they wanted to do content marketing they needed to publish more content so we started out with the sas model mid 2014. but these are mostly kind of e-commerce brands right creating content for their shops and their websites that are shoppable in the beginning that that was in indeed the case but we we at some point we saw this storytelling blogging thing is is nice but it's probably not mission critical enough we we saw so much more potential for this for this automation of design because why restrict it to it like one small portion of your website and so the the latest updates we've launched are to create landing pages some some some clients users to build their home pages or to inject existing content into these relatively static uh product grid views you know and so everybody wants to enhance the experience but the tools out there often the shop systems are a bit well let's say rigid in a way so they don't let you especially if you don't have id skills and change stuff fast and quick test things uh throw it out put something else in got it okay good so like drag and drop kind of whisky wig so that the marketing and sales teams can do this themselves without having to you know integrate their dev teams yes when one expects perspective because um the same thing well what you see is not necessarily what you get because what france all right this is like simple though i mean who are you selling to marketers or developers oh definitely marketers yeah the marketers e-commerce uh e-commerce yeah very good okay and how many customers have you scaled you over the past six years um more than 100 more than a hundred okay and and you know was you were you always priced at three grand a month on average or no oh no no we have some old legacy plans that first client paid probably 800 and they have a two-day cancellation or like notice period and and that was the first we had to get a foot indoor right people needed to believe that the machine could take over parts of their website and do the layout um for it so uh no we started much much slower than that okay so i mean if i take 100 customers times three grand a month that would put you at about 300 grand per month right now on revenue is it accurate yeah that's pretty pretty accurate okay and then take me back a year what were you doing a year ago uh around 2 million so we grew over the last month from around 2 million to 3.5 roughly now and had a bit of a slow start into the into the last year but uh we're pretty happy with where we are now yeah so just to be clear if you're doing about 300 grand a month today and you were doing about a 2 million run rate a year ago that would have been about 160 grand a month so you've almost doubled year over year or sorry yeah yeah you've almost doubled like 76 or something yeah okay very good and walk me through you know you got your first customer you told me what that contract looked like but how'd you get your first 10 customers what growth channel did you use oh actually back then with a very small team it was basically so we're based based out of berlin germany and my co-founder and i were basically well reaching out to people going through our investors network well traveling the country up on the cheapest train tickets we could find um hoping to to to get into get foot in the door somewhere um and we did that until we had around probably 15 20 customers and at that point we saw well to be honest because we came from that b2c background we had to make a couple of adjustments for business use for example people did want to want to be able to schedule posts for a sunday private people didn't need that businesses did so um the first first five to ten customers were pretty slow because we had to make some adjustments in the product um that was around until mid 2015. how are you getting customers how are you getting customers today what growth channel are you using so uh different different channels a lot of a lot of trade shows and still some some cold reach out called email um linkedin works really well um some performance marketing um mostly probably worth not okay that still works works works very well word of mouth is hard to kind of quantify for my audience in terms of a strategy that's working talk to me more about the trade shows right so what would you pay to go to an average trade show and how many leads would you expect to get from there it's probably fifteen uh fifteen thousand to twenty thousand a month as the twenty thousand per trade show and uh well we usually get at least one deal out of a trade show um so let's say anything like if it's five really decent leads it's good enough for us um sometimes it's it's uh it's 10 sometimes 20. um sometimes it's also people we've spoken to before but for them it's really helpful especially from an old sort of industry and meeting to meet somebody in person that's really important for their purchasing decision so we we see this as an important step even though we might have talked to them before and it's a bit hard to quantify that it's at least one new cold lead per trade show so are you then can we back into your cac this way are you happy to spend about 15 grand to get a new 3 000 a month customer uh and the customer acquisition cost well it's a bit higher because we have some some some other chance it's around 25 000. okay so you spend about 25 000 bucks to get a 3 000 a month customer okay so payback is what less than a year yeah definitely and are you at this price point um expansion revenue starts to become a real thing if you have things to upsell do you have meaningful expansion revenue and upsell revenue yes will you however we should should have much more so our average uh um but we have net negative churn last year for the first time for first half year uh we didn't have so much to upsell but with a new product line uh things have yeah have taken off a bit how net negative um let's say over the next last 12 months well let's say about about zero um last uh last six months it was probably 2.5 uh negative per month okay that's i mean that's good uh negative per month um there's still still room for improvement but yeah it's a start yeah so just to be clear i mean when you annualize that if you take you know 2.5 times 12 you're talking about almost negative 30 net negative churn annually that would be would be amazing but let's see if we can if we can scale it scale it this way but uh i think we're on a really good track track no it's not about like is that a good number or amazing or not it's what what are your numbers right now so if it's negative 2.5 net negative per month right now is there any reason that wouldn't continue for the next 12 months i don't see any i don't see any yeah so so with someone that signs up with you for three grand a month in in year one what do they typically expand to then in year two oh that's really something i cannot tell you right now because with so little so little data points on on on these on these type of clients the new clients start with a more complete package let's say at a much higher price point obviously so it's really really hard to quantify with some some clients that have tripled in in revenue and some that have stayed relatively the same over over two or three years really hard all right i would have to take a guess a lot of potential there but it's yeah it would be random run guessing more or less and what's that what's your churn today gross churn before you add back expansion crosster on average was around 1.3 last year okay for the whole year or from monthly yeah monthly yeah okay no no yeah so that would be about 15 uh annual return yeah yeah that's great that's great and talk to me about the team today how many people 45 right now where's everyone based everyone berlin um most of us in berlin a couple of couple of guys in london and well sort of a sales trial outpost in new york okay very interesting um the the the new york-based office is it mostly sales or engineering or what well it's actually one one one sales guy so oh okay and sort of putting pudding yeah getting a feeling for the market doing that and friends have you bootstrapped or raised we have uh raised from the from the very beginning okay how much have you raised to date uh around four and a half million dollars okay any plans to raise you know in the next couple months yes definitely and we're actually in conversations with a couple of people now yeah and why raise now why is it the right time um i think great traction um so far we're really well known and i think what we've been pretty successful in the german-speaking market um a couple of clients in the uk but still there's so much so much potential and well first of all rest of europe but obviously the us still is is probably the largest and most interesting market and uh yeah it takes money to to enter other markets and uh especially in the u.s so do you have leverage going into these conversations are you are you profitable today we're not profitable today today no okay but i mean given given numbers from last month's i'm pretty confident we're going to be able to face around okay as it means when you look at how much you're burning today we're talking like 100 grand or like 500 grand or 10 grand unfortunately not 500 no it's it's between 100 and 150 okay and the reason i ask is i always like to get like a ratio of of kind of how much runway you're giving yourself right so we at what moment how many months of runway do you have in the bank where you say okay i better start fundraising now when we started to fundraise we had probably oh well even a bit more than a bit more than 10 and so now we still have uh about half a year okay very good very good we closed the round earlier right but you don't want to wait until last minute yes probably how many how much are you looking to raise what's your target somewhere between five and 10 million yeah and you're gonna do that in in the uk or you think you'll come to the states um we're talking both to u.s investors but primarily european ones our experience is that most u.s investors well we're probably at the lower end of the the revenue they're looking for not having like proper office with with several people on the ground and not having um at this point any u.s clients it makes them feel a bit uncomfortable often we're told come back when we have when you have 10 clients in in the us and so uh yeah focus right now is europe of course we're open to conversations in the us as well yep very good all right let's uh let's wrap up here friends for famous five number one what's your favorite business book um that's an interesting that's an interesting question uh the the art of war by sun two number two is there a ceo you're following or studying um not one specific one no i wouldn't no number uh three what's your favorite online tool for building the company slack and uh number four how many hours of sleep do you get every uh every night [Music] i have a almost newborn son so somewhere between three and five with interruptions and then what's your situation just one son married single you have to get more kids or no one once i'm married i think that the first is already quite a challenge married kiddos and how old are you i'm 36 36 last question friends what do you wish your 20 year old self knew um i would probably try to it sounds like a path you would fail faster and i think we held on to a couple of things for too long even though we knew already in our hearts that they weren't wearing the right things to follow anymore to focus on guys cut bait faster launched stylo back in 2012 now has about a hundred customers paying three grand a month doing 300 000 bucks per month in revenue up from about 170 grand per month just a year ago they raised about four point five million bucks burning call it in about 150 grand per month team of 45 people in berlin 15 annual churn now today though monthly net negative two point five percent uh churn as a drive expansion paying about twenty five thousand dollars to acquire a new three thousand dollar a month customer so less than a twelve month payback period a lot of their growth coming from trade shows again as they look to make uh help marketers really create a better experience on the websites you know started really in ecommerce now expanding to additional niches friends thanks for taking us to the 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