How Sustainable Platform Reached $1.1M Run Rate Selling ESG Data to 30 Fund Managers (Interview with CEO Mark Andrich)

Introduction and Company Overview

Nathan Latka

00:00Guys, sustainableplatform.com. He's selling his data to 30 fund managers that care about ESG data. He takes this out of 22,000 company reports like Tesla sells it to him for $4,000 a month on average, doing $95,000 a month today, up from 70,000 a year ago, launched in 2017 when he did just 2,500 in total revenue. He's basically bootstrapped, raised 500 k. Last last chunk of that was 100 k at a 8,000,000 post money valuation. Profitable, which is

00:28great with a team of six as he looks to scale. Hoping to double revenues from 1,000,000 to 2,000,000 in terms of ARR this year. Hey, folks. My guest today is Mark Andrich. He's the founder of sustainableplatform, a SaaS data provider dedicated to providing the most important sustainability data and risk metrics to fund managers invest invest sustainably. Mark has a PhD in engineering and previously worked as an analyst and trader at EWE World Fund in New York.

00:52Mark, you ready to take us to the top?

Mark Andrich

00:54>> Yeah. Let's go, Nathan. Thanks.

Is There Big Money in ESG Data?

Nathan Latka

00:55Alright. Is there is there big money in ESG data?

Mark Andrich

01:02>> There's there's big money with the fund managers making money with ESG data.

What Sustainable Platform Sells and How Customers Use It

Nathan Latka

01:08All right. Explain to me what you're selling to them and how are they using what you're giving them?

Mark Andrich

01:12>> Okay. So we're providing independent data on companies to help investors understand the environmental and social credentials of what they're investing in and how that relates to the performance metrics from a financial perspective as well.

Nathan Latka

01:30So give me an example. What's a company that you cover?

Mark Andrich

01:34>> So let's say a company might be, I don't know, Tesla. Tesla. So for example, but we have 22,000 companies on the platform. So it's pretty much every globally listed company almost. So, you know, Tesla's making electric vehicles. That's their, I guess, primary product and service. We're looking at the product and service saying, okay, how clean and the how clean is the the product you're making for the environment and how good is it socially? And then comparing

02:06>> that with whatever other company you wanna look at.

Example: Covering Tesla and 22,000 Companies

Nathan Latka

02:09And so what are the data endpoints you're providing to the investors? Is it is it, you know, tons of carbon released per year or what are the actual endpoints?

Mark Andrich

02:16>> So it might be,

02:20>> let's say, number of electric vehicles per year, but the impact of that from an environmental point of view. So how much fossil fuels are companies producing? Let's say how many

02:41>> how do I describe it? So you have it's more the impact of the company's product and service rather than just the operational metrics. So ESG tends to be, let's say, how much carbon emissions do I have? You might be, let's say, you might be a producer of something that is hurting people or harming the planet, but maybe you're doing it in an efficient way. ESG tends to give you a good mark for that.

Nathan Latka

03:10What's an example of that? A good ESG mark, but harmful.

Mark Andrich

03:15>> So maybe some types of weapons manufacturers, let's say, I don't know, a tobacco company. So they might say they might, reduce their cigarettes year on year with lower emissions. Maybe they've got good workforce policies. I'll give you a good example. ESG tends to be a lot about disclosure and a lot about providing data.

Data Endpoints and ESG Metrics Explained

Mark Andrich

03:41>> So I might disclose to you, Nathan, that I'm going to punch you in the face. Right? And I might also tell you I've got a policy to not punch you in the face. Now the impact is that I've still punched you in the face even though I've got a great policy and

04:00>> I guess the

04:03>> impact is the same. So what we're looking at is, okay, is say Tesla providing a product that's helping people or harming people? How much is it helping people? How much is it harming people? And then how does that compare to the other car manufacturers, for example? You know, we had VW as high risk because it produced diesel cars.

Nathan Latka

04:23Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:46your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:10get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

05:32not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:58going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but

06:20if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into

06:46the interview. And, Mark, how are you? I mean, any company that's providing data, you've gotta you're either structuring data better than somebody else. You have a data source nobody else has or you're massaging the data some other way that others can't do themselves. What is your moat?

Competitive Moat and Proprietary Methodology

Mark Andrich

07:02>> Yeah. So we we take companies publicly available information.

07:07>> So, you know, the annual reports and their websites and things like that. And what we do is we actually translate that information. We take out the text, but we put it through a sustainability lens. So it's really the lens on a company's data that then allows us to create the risk metrics and

Nathan Latka

07:27Why can't somebody else do that, though? I mean, why can't someone else build something to parse an annual transcript and get the same thing you're getting?

Mark Andrich

07:35>> I mean, someone can do, but they'll come up with different metrics and it won't be as as critical or as easily helpful for fund managers.

Nathan Latka

07:45So your IP are the math formulas you run against data points you pull out of annual reports where you know this is what the fund managers care about in terms of ESG rankings?

Mark Andrich

07:56>> Yeah. We know what it cares about. We also have tested it for performance and risk so we can show five years of, say, time series data fund managers can

Nathan Latka

08:04I see? Give me give us a taste of that. What's what are two metrics fund managers really care about when it comes to ESG?

Mark Andrich

08:11>> Say fossil fuel exposure. So how much a company's

08:17>> spending or selling with fossil fuels.

08:22>> One is say SDG contribution, sustainable development goal contribution, because they want to see what type of sustainability impact they're making through the UN SDG lens.

Nathan Latka

08:35I see.

Mark Andrich

08:36>> And

Nathan Latka

08:37Alright.

Mark Andrich

08:38>> And then yeah.

Pricing and What Customers Get

Nathan Latka

08:39So how do you make money? Right? So what are fund managers paying on average for this data on an annual basis?

Mark Andrich

08:44>> Well, on average, they're paying about 4 k a month.

Nathan Latka

08:50Okay. And what do they get what do they get for that? Is it a number of data endpoints? Is it number of companies you're covering? Is it all 22,000 companies?

Mark Andrich

08:56>> Yeah. So they get access to all 22,000 companies. They get access to risk metrics. They get access to our knowledge base. They get access to our SDG contribution, so our sustainability contribution charts that they can use in their reports. And they can also show their institutional investors or, you know, they're actually getting their own sustainability assessment done independently because what a lot of ESG fund managers or people do is they'll say, oh, look, we're sustainable or

09:28>> we've got these ESG credentials. We're kind of like an independent, I guess, umpire on are they or are they not? And we give them that data so they can test it themselves before they go to market with it.

Customer Count and Revenue

Nathan Latka

09:42And Mark, how many fund managers or how many customers do you have today?

Mark Andrich

09:46>> So we've got about thirty thirty fund managers directly. Indirectly, because we've got some partnerships, there's there's a few 100.

Nathan Latka

09:56So 4,000 times 30, you're doing about a $120,000 a month right now in revenue?

Mark Andrich

10:01>> Yeah. We did about 95 k last month.

Nathan Latka

10:0495,000. Okay. And what what what's that up from? What was that exactly a year ago?

Mark Andrich

10:09>> So a year ago, it was about 70 k.

Nathan Latka

10:1270 or 7,000?

Mark Andrich

10:14>> No. 70.

Nathan Latka

10:15Seventy okay. Got it. And when did you launch the business? What year?

Mark Andrich

10:19>> Launched it '20 end of twenty seventeen. So we've been going quite a

Nathan Latka

10:23Okay. Do you remember what first year revenues were?

Mark Andrich

10:27>> Yeah. About 2,500.

Nathan Latka

10:32How'd you support yourself back in those early days?

Company History and Early Revenue

Mark Andrich

10:35>> I was I was doing a lot of consulting work in kind of a similar area, but but more, well, like financial modeling and sustainability analysis. It was consulting work that paid for the business.

Nathan Latka

10:50Were you a fund? Did you have your own fund at one point? How did you build empathy for your customers?

Mark Andrich

10:55>> Well, I worked for a fund. That's a really, really good question. I worked for a fund in New York in the early two thousands and I love the idea of investing sustainably, but the term didn't really have any meaning or I hadn't even heard of it back then. Really, I tried to invest sustainably myself with the ESG data that was available and with what companies reporting. And it was just impossible. So I built the I actually

11:23>> built them or helped I got some software developers to build it, but I built the

11:29>> models and the methodology by trying to invest sustainably myself in a way that also enhance performance.

Team Size, Sole Founder, and Funding

Nathan Latka

11:39How many full time folks are on the team today?

Mark Andrich

11:42>> Full time is there's six.

Nathan Latka

11:45Six of you guys. Okay. And are you the sole founder?

Mark Andrich

11:48>> I'm the sole founder. Yeah.

Nathan Latka

11:50And bootstrapped or you've raised a little bit?

Mark Andrich

11:53>> We raised a little bit. We bootstrapped initially, but we've raised 500,000 over the past three to four years from friends, family and employees have put in a little bit as well.

Nathan Latka

12:06When was the last round?

Mark Andrich

12:10>> We About a year ago.

Nathan Latka

12:13Okay. And how much did you raise then?

Mark Andrich

12:15>> That was a 100,000 from a

Nathan Latka

12:16Okay.

Mark Andrich

12:17>> Yeah.

Nathan Latka

12:18And and how did you so was this like a rolling note you just left open or what was that? What was the cap on the 100,000 that you raised?

Mark Andrich

12:27>> So around it was around 8, 8 mil.

Nathan Latka

12:30Oh, wow. Okay.

Mark Andrich

12:32>> Yeah. What we've done is really we've been very careful about who we've selected as well. I mean, it's a combination of us selecting that sometimes they don't want us as well. But basically, you know, we've been very careful about who we choose as, I guess,

12:52>> as investors. But it's also, you know, we also kind of would rather get customers than investors.

13:01>> So we've just sort of gone along like that.

Nathan Latka

13:04Yep. So when you take all the dilution from the 500 you've raised, what you still own more than what, 85, 90% of the company?

Mark Andrich

13:10>> Yeah. That's right. I own just over 90%. Yeah.

Profitability and Reinvestment

Nathan Latka

13:13That's great. And and I love obviously money from customers, especially if you're also mean, are you also profitable?

Mark Andrich

13:19>> Yeah. We've been profitable for three years now.

Nathan Latka

13:22I love that. Are we talking like $10,000 a month in profits or like a $100,000 or you're basically like breakeven?

Mark Andrich

13:28>> It's it's been kind of breakeven, but only because we've been investing as much in the product development as the revenue allows us to.

Nathan Latka

13:38Yeah. So what do think you grow to this year? You're at 1,100,000 run rate right now. What do you think you finish with?

Growth Goals and New Product Launch

Mark Andrich

13:44>> Well, depends on a new product launch. So we've been hoping to double it this year, the revenue, but we actually have a new product which is allowing people to purchase company level reports, which we've done in the past. So now any company- So you know, any company or person could actually purchase a single company report

Nathan Latka

14:05How much?

Mark Andrich

14:07>> Commercially. So that's going to be- We've sold them in the past actually for 50,000 a year.

14:14>> But we're actually we've got them online at the moment for a noncommercial use at around 2,000, 2,900.

Nathan Latka

14:28For the one report?

Mark Andrich

14:30>> Yeah. Yep. Yep. Basically, all the data on the on the one company. Yeah.

Nathan Latka

14:35We'll see. Do you ever get approached by these funds to just just acquire you? And if so, if someone offered you, I don't know, $8,000,000 all cash upfront? Do you sell?

Acquisition Interest and Independence

Mark Andrich

14:45>> Look, we we I guess we we talk to we talk to everybody. We haven't in the past done it, spoken to any funds like that. I guess we'll see what happens. I mean, we kind of part of our value proposition is that we're independent of the fund managers. And so, you know, we're actually able to give them, I guess, really good independent information. But, you know, we'll see. I mean, it's a pretty kind of exciting area

15:15>> and it's been growing pretty fast.

15:16>> We've also arranged because of this podcast to give a discount to your customers. I don't know if we're allowed to do that, but we've a discount.

Nathan Latka

15:25Yeah, give it to them now.

15:26What do you got?

Mark Andrich

15:27>> So it's it's Latka, LATKA2023 for the company reports off our website.

Nathan Latka

15:35And what's the URL? Where can they go to skip that?

Mark Andrich

15:38>> Sustainableplatform.com.

Nathan Latka

15:40Alright. There you go, guys. If your fund manager's listening in, you wanna understand ESG reports, sustainableplatform.com. Code is Latka2023. Very cool. Mark, on that note, let's wrap up here with the famous five. Number one, favorite business book.

Famous Five Rapid Fire

Mark Andrich

15:53>> The Prize by Daniel Yergin.

Nathan Latka

15:56Number two, is there a CEO you're following or studying?

Mark Andrich

16:00>> No. Not really.

Nathan Latka

16:01Number three, what's your favorite online tool for building the platform?

Mark Andrich

16:05>> Well, don't know if it's building it, but LinkedIn for finding customers.

Nathan Latka

16:09That's fair.

16:10Number four, how many hours of sleep do you get every night?

Mark Andrich

16:14>> Between three and ten.

Nathan Latka

16:17What's your situation? Married, single, kids?

Mark Andrich

16:20>> I actually- I got a new partner with two kids and then I've got two kids myself, but they were abducted to Russia by their mother and grandparents a couple of years ago. So I try to call them every night.

Nathan Latka

16:36So that's Oh, wow.

16:38>> Yeah.

16:38That's a heck of a story. I want to dig deeper there, but we're sort of out of time. But you have four kiddos, two of them in Russia.

Closing Advice and Wrap-Up

Mark Andrich

16:45>> Basically, yeah.

Nathan Latka

16:46Okay. Very cool. And how old are you?

Mark Andrich

16:49>> I'm 44. And if my kids are listening, they need to they need to get hold of me.

Nathan Latka

16:54There you go, guys. Kids, if you're listening this, call your father, okay? Alright. Last question. Last question, Mark. What's something you wish you knew when you were 20?

Mark Andrich

17:03>> I wish I knew that when you have when you're given two options, you actually have four options. So people say, do you want A or B? Well, you can actually choose neither or you can choose both. I wish I'd I wish I'd thought of that and known that back then.

Nathan Latka

17:18Interesting. Guys, sustainableplatform.com, he's selling his data to 30 fund managers that care about ESG data. He takes this out of 22,000 company reports like Tesla sells it to him for $4,000 a month on average, doing $95,000 a month today, up from 70,000 a year ago, launched in 2017 when he did just 2,500 in total revenue. He's basically bootstrapped, raised 500 k. Last last chunk of that was 100 k at a 8,000,000 post money valuation. Profitable, which

17:47is great with a team of six as he looks to scale. Hoping to double revenues from 1,000,000 to 2,000,000 in terms of ARR this year. Mark, thanks for taking us to the top.

Mark Andrich

17:55>> Thanks, Nathan.

Nathan Latka

17:56One 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. One founder comes on, three hungry buyers, they try and do a deal live and

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