How Tiltsta CEO Bonny Morlak grew Tiltsta to $600K revenue and 10 customers in 2018.

hello everyone my guest today is bonnie morluck he's the founder and ceo of a company called tiltster.com he's got a deep interest in human behavior and has a love-hate relationship with mobile ux and ui he's striving for equinominous awareness efficacy resilience and empathy bonnie are you ready to take us to the top absolutely good morning everybody good morning all right tell us about tilsta what do you guys do and how do you make money right so tillstar is a shoppable video platform we are the fastest shoppable video creator um and we create um shoppable videos that you can insert into your social media stream enabling social commerce basically and walk me through pricing model how do you make money we take a cut of the value we push into the brand's shopping cart basically so we are focusing our first vertical is fashion brands and fashion shopping and the value we are pushing into that checkout page we take a cut off that so bonnie the push back there is when you're selling into whoever you're selling to the cro cmo is going to say well listen bonnie i need to be able to like to have a fixed thing in other words if i'm doing if i start paying you 300 bucks a month that one level but then i have to factor in if we grow ten times i'm paying you three grand a month like that doesn't make my planning easy how do you deal with that sales objection well that's a very good question so we believe that we that the value-based pricing is the easiest for for for us to sell it has proven to be the easiest to sell because we put our money where our mouth is so if we are not successful you don't pay a cent and if we are successful we just take the same cut all the way um of course if you have some leverage let's say your name was kelvin first name and client surname you know like we can negotiate something here but generally speaking that that is that is a really good monetization model okay so it is pay as you go it is not a sas business it is not as an ongoing sas fee though there's no flat rate it's you know we sign you up we integrate you we have a contract and then you use it as much or as little as you like and we believe that because we have a very high conversion rate and we increase the conversion and we also increase the awareness the roi is very high and people just keep using it more and more and so right now today what would you say the average customer pays you per month the average customer pays us per month that is actually something i don't like to discuss on radio okay it will give me some sense of i mean are we talking about a hundred bucks a month or a hundred thousand a month um around the 10 grand month um so you're very much playing in the enterprise space then absolutely 100 so our target group are um fashion brands 50 million dollars per year and up okay got it so you you really will only focus on 50 million or higher and so you're working with a very small handful of clients that pay you a lot of money correct we are also very happy to engage with up-and-coming shooting stars um fashion brands that are you know loved by the press killing it on social media we are dealing with them as well because they are first of all they're growing where we want them to be and name one of those right now name one of those right now um who's it up and comer up income heist mobility would be good you ice mobility would be good um supreme would be good um there are yeah so a number of the the cool factor brands and some of the sneaker brands actually are pretty pretty cool as well and sports and sports um fashion is a very hot market at the moment so outdoor voices for example is a very good example of people with organizing and so let me ask you if i'm running supreme right and i'm paying you per month i think one of the i love the value-based approach you take but i think what would go through my head as we scale is is i'm saying you know we have a team of 1 000 people and we're spending a million a month on marketing and all this and basically every extra dollar we drive bonnie is basically saying hey that's because of our software we get it we get a cut of that when really it's a whole organization making it happen so just your percent on a percentage basis is what you're taking go down as volume of sales go up so there are different approaches and we are very much negotiating individual contracts so sometimes there's a cap sometimes there's a tiered pricing and so on so it really depends on on the value um that the company brings to our pr basically and it and it also depends on the volume they're pushing through so individual things so we have a number in mind of what we want to make with per customer and we arrange it around that i see all right give me more of the back story here when did you launch the company we launched the company beginning of 2016. um so my co-founder technical co-founder exited his last company and took a year off did he get rich wealthy how do you incentivize someone that's already wealthy well he's the sort of guy that runs through the world tries to solve problems right so so he took off for a year and he um traveled the world europe and and asia and so on and he wrote down every business problem he encountered from you know ice cream leaking on your hands to squeaking doors and so you wrote down 736 different problems 736 correct wow so and then you went back to the sunshine coast australia we're an australian company um and whittled it down to five and um got a few hackers in and rented a house by the beach every room had a hacker some group is floating in the pool and it was just like a real crazy environment a little bit like like um the silicon valley show and then he whittled it down further to to to tilsa so the the premise here was that he thought that video navigation on mobile phones sucked so that basically the desktop video navigation you have a mouse pointer and a slider and a button works relatively well and then i just scaled it down to a small screen and with my big fingers it just doesn't work so well right yeah and he said like what can i do with a mobile that i can't do and with a desktop and one thing is you can you can move your mobile in this three-dimensional space like a joystick so he started to experiment with you know stopping starting fast forward and so on and so on um and created an app to to record and and send videos with motion navigation i entered the company at that stage and so does he own like 70 and you own 30 or like your minority shareholder since he created it let me say if you want to invest in our company i'm happy to share our cap table with you well my point is my point is he you know because it's an important pattern companies get started by business guys they have to give a big big chunk to this you know the tech guy or it's started by the tech guy and they give up some portion of the business guy right you gotta have both how did that negotiation happen i'm assuming it's not 50 50 since it was his idea first he has slightly more than me but he's a very fair guy he understands what value i bring in and i understand what value he brings in so basically he pursued you or you pursued him he pursued me and then why did you agree because i fell in love with the with the software so with the groupies [Laughter] so it was there was an ad in the australian version of craigslist and it said looking for ux designer must be good and that was the most stupid ad i've ever heard but i thought like either the the person is a genius or it really does yeah yeah exactly so so i went there and he's a genius like an absolute tacky gene is one of those crazy people right and um and i fell in love with the idea the software that he had at the time was so ugly and it just was itchy in my fingers to make that that prettier and all right so that was all recent 2016 this happened you go in full stream what are you guys at today in terms of team size how many people i think we are if you count the five interns we are 21 right now 21 okay and how many customers have you scaled to um we have just started in the u.s so we are about to sign up our first customer in the us so as i said we are an australian company we have customers in europe well internationally though you're all your customers are we talking like 10 customers or 100 customers how many customers total around 10. around 10 great which makes sense again it's a high kind of a high price you know high margin product so 10 customers and where are most these customers coming from how are you landing them is it your relationships or his or what so cold calling enterprise customers is a very frustrating game so we are very much into networking partnerships um also we selected very strategic investment with investors that that have partnerships and that have um warm intros how much have you raised to date one how much total have you raised to date 1.4 million okay and that was all debt or priced equity round equity oh good great so we we had some convertible notes initially um 2016. so publicist group um the advertising network invested in us back then we won um in a startup competition back in 2016 like...