Thesnapbar Revenue (2024)

hello everyone my guest today is sam eisen he's the co-founder and ceo of snapbar an inc 500 company that uses photo and video experiences to help planners producers and marketers create better engagement at events he also co-founded keep your city smiling a gifting company that supports small businesses struggling as a result of the pandemic sami ready to take it to the top yeah obvious question pandemic means no events no events means no photo booths what are you spending your time on today yeah two pivots uh keeper city smiling being one of them we took our team and moved to sell gift boxes to individuals which then resulted in us finding that companies and a lot of our corporate clients would actually do great with large orders to like work from home like so basically care packages for their team members and then we also developed a virtual photo booth uh software that we are using for a lot of virtual events that our clients have pivoted to interesting so when you were so let's talk pre pandemic for a second give me a sense of scale of a company what'd you do in like 2019 total revenue yeah about 3 million in 2019 on track to do four to five 20 20. um we at four photo booth company were pretty big i mean quote unquote right like it's a pretty small industry and yeah our events were primarily about 85 of our revenue was corporate 15 was private events like social events weddings et cetera and what do you think that so now let's break down 2020 let's say you do hit 5 million in revenue what's the breakdown oh goodness probably the breakdown would be 70 percent keeper city smiling i you know to be clear i don't think we're going to do 5 million we've been hit pretty hard revenue dropped off a cliff but if we did yeah 70 keeper city smiling and 30 virtual photo booth it's a new piece of technology a lot of people don't even understand what it is uh but it's basically like a browser-based photo booth that is a fun add-on to virtual events that at times can be boring well sam i mean dive into this this could not have been easy i mean 2020 i mean you're on a freaking rocket ship you're earning awards like crazy are you bootstrapped or did you raise we're bootstrapped okay well that that at least gives you a little bit more flexibility but it's still painful as heck i mean so walk through i mean march comes around things start shutting down you probably start getting cancellations and imagine what february late february right floodgates open up uh we noticed the first massive hit to our company when south by canceled south by southwest they were we were activating there at a bunch of different uh events and sub events and that was a pretty big blow after that yeah mid-march the floodgates opened i think we lost about three to six months of earned or like potentially earned income overnight and sales since then have continued to be just absolutely dead and not only that but we had refunds to give we take deposits if we don't do any work for your event and it's further than 30 days out you are owed your money back so we bled hundreds of thousand dollars in the when that first started happening which is why we had such a significant and kind of like aggressive pivot outside of the events industry we were so pessimistic about when they might come back that we felt if we didn't do something that could earn cash fast uh we would have to lay off our entire team and e-com e-commerce was kind of our our guess that that might work what we were surprised by when we pushed to e-commerce was that again it was these brands big companies like microsoft google that would purchase 200 300 800 boxes in one go brand the boxes and send them to all their you know people on various departments and teams working from home and so we were spending so much money acquiring individual customers on social media that we kind of have shifted focus and said you know what we're going to be a corporate gifting company that focuses on connecting big brands to local businesses local vendors what hence the name keep your city smiling right it's a gift box company but the twist is that it's very intentional and it only supports small business let me make sure i understand that i want to dive sort of more into how you've done this i mean this is a remarkable pivot uh if you're able to pull it off so if microsoft is in seattle and they want to support a local small business hit hard by the pandemic let's i'm going to make this up let's say it's a it's a local like picture framing shop a mom-and-pop shop they weld metal picture frames together microsoft would essentially buy 800 custom done metal frames from the local small business and then ship them internationally to all the microsoft employees as like a gift that is basically what can happen what the one step that is kind of work that we're making it easy is that we're selling or packaging a keep seattle smiling box for microsoft's seattle employees but i'll take another company another tech company for example that had headquarters in new york austin san francisco and seattle they were able to buy 800 boxes and ship them to every single employee that were based out of those cities with five small business products like craft coffee tea chocolates from the cities where those people were based to connect them to local brands and vendors but because we also uh like customize and curate the contents it's absolutely possible the minecraft microsoft say hey we really want this we really want you to find a small business vendor that makes cute little metal picture frames please include that and we handle the logistics we brand the box we we tell the story as well of maybe the founder or founders behind that little metal picture frame company and try to connect the people in seattle um or globally i mean it really depends right to like the story of those small business owners gosh building the logistics to i'm trying to think about what could you reuse from a photo booth company to source local small businesses to find products that you could sell to bigger enterprises in those same locations to sell back to the local employees like that doesn't seem like there's a lot of reusable technology there not a ton i'll tell you there's three pieces of technology we're using where we had a big printer that wrapped photo booths that we used to brand the boxes meaning we can control branding um and printing inside the in-house we have we use old school photo booth printers to print strips and that's where we tell the little stories we call them who you're keeping smiling um or who you're helping smile i can't remember exactly the terminology that kind of profiles the the vendor or the the founder and then we have a we had a warehouse that used to store and ship photo booths and now it's been transformed into a box sending business but that's about it the team had to pivot and i mean not pivot's a weird word but you know had to completely transform what they were doing and people that were wrapping and branding photo booths spent eight hours a day folding cardboard boxes it was not glamorous this is incredible my gosh has anyone has anyone interviewed you like hardcore about this to capture this sort of full story we've done some like we had an ink profile we've had a couple like forbes and uh you know like articles written about the pivot um but no well what do you think that what do you think so you've talked to like traditional reporters and all that what do you think all of them have missed about the story i think it takes someone who understands business and entrepreneurship to realize just how drastic the switch was so pivots are a very sexy thing right but pivots are often here's what i used to do in person events and i've pivoted to virtual events but our pivot was really more of like i don't know i mean i don't even know what if it's considered a pivot necessarily we had to create a new business and we did it in about eight days yeah i mean i'm looking at you going like i don't care what you do the rest your life if there's any opportunity for me to like give you money i want you to have my money because you've built a team and you executed literally launching essentially a new business overnight yeah yeah it was about eight days from concept to when we launched the first website and then we basically took pre-orders for two weeks to buy us extra time as we sourced small vendors from our first box which was seattle um and we sold in the first three months we did 500 000 in sales um with no marketing spent other than like amateur pr march april may are the first three months yeah uh we started we launched the website on march 19th so it was from march 19th to may 19th yeah and before we go back and just talk about again south by canceling and the financial impact that it had on you on 500k in sales on the new business model what's your margin on that obviously you have to pay for the actual products it's your cost of goods sold is probably way higher than the photo booths right way higher so our product margin gross product margin is about 40 net business margins maybe five because we're very new at this and i'm sure we're relatively inefficient in some ways whereas when we were running a photo booth company our product margins were 300 maybe more yeah so you'll make 25 grand on 500k topline sales 5 yeah give her give or take yeah honestly about that after everything's said and done okay so let's go back to february for a second just like let's act like we're taking a snapshot of the business um how much cash was in the bank uh about seven hundred thousand dollars and what was team size 18 people or 17 people full time okay 17 people and what was at that point your run rate how much revenue were you doing per month i mean it varied but between 200 and 400 000 a month okay and profit margin on that i imagine was way higher than five percent yeah like i said very very high i mean i mean product margin was like 300 percent uh net business i think we were at basically 33 to 40 net business yeah so on on 400 current let's just use 200 make it easy on 200 grand in top line sales in a month i mean you're pulling down 75 grand in profits as a bootstrap entrepreneur amazing okay so this is february uh you i'm livi i'm living in austin so i was watching the south by thing going oh my gosh we're gonna be like a virus hot spot if this thing happens they have to cancel i mean would you agree with the right thing to do i think so yeah ces just announced three minutes ago that they're canceling for 2021 right i mean you don't want to be liable but you also don't be irresponsible in spreading this thing and while there's so many things that are unknown and there are ways to put on safe events and i'm a huge proponent of that because i'd love for my industry to come back i don't want the virus to spread so it's it's a hard position to be in so adam you said hundreds of thousands do you know the exact amount you had 700 grand cash in the bank you had already accepted pre-orders for future events that canceled and asked for refunds how much you have to refund back out gosh i honestly can't remember it was pretty brutal we refunded maybe 50 to 70 000 we had a ton of other cancellations where we were going to be getting paid and that just dropped so it was like a combination of us refunding like payments we thought we're going to be coming in not coming in and then future sales deals in the pipeline basically just vanishing and so over the it wasn't that we had this money in the bank and all of it went it was that a bunch of it went and then nothing came in yeah so true or false i mean your cash balance after refunds you had about 600 grand to work with executed pivot in something under 30 days uh unless because of payroll was so high and we didn't let anyone go at that point in time we've had to let two people out of the 17 go since then um and we also had a ppp loan granted to us if we if those things hadn't happened we'd be looking at maybe 250k left yeah how much was the ppp loan at 217 000. that's nice yeah that's that's great and this is exactly this it was supposed to be the exact use case for where to use ppp effectively um interest okay so 17 people so okay so you so what is what is the conversation as the leader of this company are you the only founder do you know 100 of the company i'm 50 50 with my brother okay so i mean i mean what is on earth is the conversation you guys are having you come into the meeting you guys got the email that south by's cancelled everyone is wondering oh my gosh that means we're losing revenue they know it's a big account for you guys what do you say in the office that day what's that motivational speech sound like i mean it was tough because first off the 700 that we'd saved up was truly our life savings it wasn't so much like yeah we were probably not the best like strategic thinkers when it came to how to use that cache and so we'd let it pile up thinking we're going to hire and expand the problem is we didn't have a great plan to do it so it was very difficult to see a lot of our personal future all of a sudden shrink and shrink and shrink that was like an emotionally difficult time for both of us as founders but we decided we are going to make this through we're going to not just survive but we want to actually build during this time and that's kind of what we pitched to the team we are yes obviously the goal is survival if we survive this thing as a company that's 100 reliant on in-person events we will all that will be a huge win because there will be a lot of competitors and other people that we used to say lose bids to that will not survive and that's the sad reality of the events industry right now and many others to be honest and then beyond that we didn't just want to survive perpetually for x amount of months into the future we really wanted to try to reinvent ourselves and grow something and do things that when events if events come back like they did we'd actually be better positioned to serve people get even more clients have even greater products and that's been the goal so keep your city smiling has been the focus piece but our virtual photo booth software is has been pretty incredible in the past month and a half since we launched it has generated about 140k um and the profit margins are much higher on that side again so so explain that to me explain if i'm listening to this interview right now the podcast interview you listen to nathan's show and they're thinking i run a virtual event should i try this thing how does it work so photo booths used to be used to create user generated content at marketing events music festivals conferences right here i am in the google photo booth with some awesome background and some cool thing whatever there's so many different types we took that same concept and put it onto a browser so that whether you're on your phone or tuned in from your laptop or desktop or whatever you could take and generate branded content now you'd say isn't that like it's snapchat and instagram i mean it is except that you can't ask people who are coming to an event to download snapchat or snapchat or instagram to take branded content so you have to democratize it or at least like make it completely inclusive so it's a browser-based system that the client owns so if you are asking for surveys or lead data you own it instead of i don't know how you would even do that on a platform like instagram and so you're you're essentially letting people create fun branded content we use back ai background removal to put you on your school campus or to put your event sponsor logos behind somebody and you have now content with their logo and some funny thing to say here i am tuning into the gallup work conference from home and maybe you posted social media maybe you don't but that's valuable to you sam where is this thing where can people go what's the url yeah if you go to thesnapbar.com you'll see that we have virtual solutions and it's our top virtual solution which is a yeah it's just called virtualbooth and what so i'm going there now what is it is it a is it a is a chrome extension no it's literally so you can try it actually nathan um if you go there if you scroll halfway down the page when you find like the virtual photo but click on the conferences one there's like a try a demo and there's a little button you can try some different events and if you click on the conference one it's gonna open up a separate browser and it'll say welcome to this fake conference enter you'll give access to your webcam etc and snap a photo you'll brand it you'll get the idea so is this real is it ted's using you yeah yeah so ted used us for their as they pivoted to a virtual um you know sales force is a big client doing events around the world for their teams we did a really huge event for saint jude's prom a virtual prom that they did a few months ago and so everything from schools commencement ceremonies we've had even have had some weddings lots of sales launches and conferences and internal team summits um can use this and look i mean it is just a photo booth it's not an absolute required piece of the virtual event but virtually well no but i mean you're also doing like lead capture photo gallery surveys custom stickers i mean i can see where this becomes like the b2b enterprise version desktop snapchat yeah no i mean that people are using it like that it's pretty exciting we've had people ask for you know packages in one sense of 50 to 60 virtual boost that they could use over time and so they get their own unique url right it'll be like ted.virtualbooth.com and they can just they can spread that link to whomever they'd want um and yeah there's all what's the pricing model on this is it one time for the event or is it like a sas recurring sort of thing so right now it's one time it's not a piece of sass uh yet so yeah we uh there's no reason for you to pay for it right now after the events done you could invent some reasons like store the ugc content you know reporting etc but yeah yeah we're gonna move that direction right now we have one developer one guy on our team has built all of this um in the past four months sam what a freaking story man holy cow this is this is incredible man okay very cool well we're i just we're out of time here i learned a ton listen to this what a story i can't wait to sort of follow you and see what you guys kind of pivot and iterate to but let's wrap up for now what's your number one favorite business book ooh um good to great by jim collins number two is there a ceo you're following or studying um i study the uh sacha nadella quite a bit from microsoft number two is there uh sorry number three what's your favorite online tool for building the company i have to be base camp number four how many hours of sleep are you getting every night about seven seven and situation married single kids uh married with three kids oh you are a busy man yeah holy mackerel okay and how old are you i'm 32. last question what do you wish your 20 year old self knew uh not to buy a ford focus brand new off the lot stupid but small small simple financial decisions like that i think impact long term guys the snapbar.com did 3 million in sort of photo booth revenue in 2019 we're on track to do 5 million in 2020 but obviously lost almost all of that revenue because of covet they've done a remarkable job they had 700 grand in the bank in february team of 17 people payroll to meet south by gets cancelled which is one of their biggest contracts they have to put out a bunch of refunds they have basically 600 500 grand in cash in the bank to completely reinvent the business in seven days or less they've launched a photo booth solution a virtual photo booth solution for events and also a way for enterprises to support their local mom and pop shops keep your city smiling check it out thesnapbar.com sam thanks for taking us to the top thanks nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or 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