How Tiltsta CEO Bonny Morlak grew 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 out of three and a half thousand startups we won gold and they flew us to paris and put us on stage and thing and then they invested hundred thousand euros in a convertible note that was nice on the back of that we went to the us and to san francisco um where the australian government has a landing pad they call it for startups and we did our proof of market there and then we realized that san francisco is not the fashion capital and we went to l.a and i would have been good but in in the end we decided new york um because new york is um i know it's a personal choice that's what i love new york it's a really cool city and um a lot of our target group customers are in new york it's very easy to reach them now talk to me a little bit here about churn i imagine you guys probably have no churn at this point or maybe you have some well what does churn look like yeah zero at the moment yeah yeah you guys again it's super high touch you get someone on board and you want to make sure you keep them right so we have account managers and first of all we are very fresh in the market you know we are we are mobile born we are into a an area that that that is very very new we are the only um motion controlled shoppable solution out there and just to be clear what you mean by that if i go to calvin klein.com on my phone i'm hypothetically there customer viewers right i'm making that up if i go on my phone you're saying i can look at a model and kind of move my phone and see how the clothes actually circle the model what no so what we do is basically yeah show us we can see hold your phone up yeah let's just say you are in facebook let's just say my i'm female i'm 25 years old my name is tyler that's a real stretcher but yeah we'll go with that here and uh i bought a ticket for burning man and i've i followed some fashion brands on on instagram right so here's one that is festival gear you know probably can't see it yeah there's an ad in facebook or instagram or snapchat and a little instruction comes up it says tilt your phone when you like something okay yep and then you see a video playing you get engaged when you see something you like you just add it to the shopping cart interesting and it will basically tell you what clothes that model was wearing that you liked or whatever the whole look is in the shopping cart then you throw out the stuff you don't like just like you use the shopping cart now people don't have a high buying intent at first place they just dump it there and then sort it later right and then we check out on the brands and check out package that makes sense we don't do the transaction are you guys casual are you cash to a positive yet or no no no what is that is that a priority no okay yeah that's fine and in the team of 21 based is it all between australia and new york yes so um we decided to keep our tech team in australia because the australian government gives us 45 cents in the dollar back for r d and um high class world-class programmers are about half price to the u.s and they don't get head hunted by google every thursday yeah so um it's it makes sense there's some communication overheads of course you know the time zones are horrific but we make it work and and it works really well and then last thing here before you wrap up with the famous 510 customers you said earlier they pay caught 10 grand a month something like that it's fair to say you guys have broken 100 grand a month in revenue or no you're close to it we're getting there getting there what were you giving me a sense of growth a year ago today what were you doing a year ago july 2017 we were just going to new york and doing our first customer discovery i mean i mean in terms of revenue uh in terms of revenue um zero you don't have any you have any customers at all even internationally a year ago yeah we had customers but a lot of those were testing validation customers so our our our revenue was actually more learning we are lean startup yeah um we very much believe into product market fit before scaling so and that that was our value so when do you think you will hit 100 a month in revenue you think it'll be this year or next year um that will be next year mid next year okay mid next year good so you guys are very much still kind of in the early early phases you're using yeah yeah do you have anywhere you have some revenue at this point yeah very good all right let's wrap up here bonnie with the famous five number one what's your favorite business book my favorite business book um i don't have donut hello favorite business book well what was the last business book that you read i do not read business what was the last book actually okay okay eric reese the lean startup if you would call that a business that is our our bible for for everything we do number two is there a ceo you're following or studying right now um garyvee pops up in my feed a lot number three what is your favorite online tool for building your business my favorite online tune for building my business i would say hubspot is very helpful number four how many hours of sleep do you get every night um a minimum of seven okay that's pretty good and what's your situation married single you have kids all of the above okay so married how many kiddos two sons 17 and 22. two okay good and how old are you me i'm 52. all right bonnie last question what do you wish your 20 year old self knew um [Music] that it doesn't really matter what other people think guys it doesn't matter what others think he was doing his own thing and it was approached by a guy via craigslist ad and he said you know this tilted video thing is smart this guy's a genius launched in 2016. again it's gonna video you can tilt when you like think think of it almost like a social shot you know social network like shopping cart we like these things you add to your cart and then you go back later pick what you want to keep remove what you don't want and then check out they work with fashion brands with larger than 50 million bucks in annual sales they have 10 customers right now uh you know less than 100 grand in revenue did about one and have raised about 1.4 million bucks again just turned on revenue about a year ago zero percent turn at this point because they're too early but their team of 21 based between new york city and australia where they get 45 cents back on every dollar they pay developers bonnie thank you for taking us to the top thanks for having us