How Tomi.ai CEO Konstantin Bayandin grew to $2.7M revenue and 24 customers in 2024.

hey folks my guest today is constantine bionden he's the ceo and founder of tommy.ki also ex-cmo of ozone the largest ecommerce player in russia he's an ex-martech senior director of compass xbcg stanford mba and spotted a 20 billion opportunity in digital ad optimization and real estate to now build tommy.ai one million pre-seed funding to turn lead gen businesses into e-commerce he's also an ironman finisher and theoretical physicists constantine are you ready to take us to the top yeah i'm really happy to be here and i'm a fan of your podcast nathan oh very cool why'd you agree you know people go nathan why do people agree to come on you ask him for so many data points why do you agree to come on uh we just you know to hang out with the guys from the industries sas and enterprise sas and you know expand my network uh in this way that's awesome that's awesome okay let's talk more about what you're building so so who's who's using tommy right now yeah so we have 24 customers in several industries we aim at businesses with long sale cycles and we are solving three major problems for this kind of businesses um along these long decision cycles for smbs or consumer customers offline conversions and very rare transactions and the the you know the best ice icp is a real estate developer or brokerage a bank an insurance company or automotive company and and so how do you price for this what do they pay on average per month we are an enterprise fast uh business and we charge a fee of uh five thousand dollars per month and yeah with them of 50 to 100 uh thousand dollars a year i see and so so is that your only price point or tell me tell me why someone will pay you way more or weigh less yeah so we have a tiered pricing system so if you uh optimize your advertising spend to a certain limit or for one hundred thousand dollars on google and facebook per month uh you pay the start starting um package of five thousand dollars per month if you go beyond that you get the next level uh packages with you know some discounting on the paper usage price so constantine just be clear five grand a month that's money to you or that's money they're giving you to spend on ads but we are a software so we don't run the ass ourselves we provide a solution to do it in a more efficient way to our customers they run as by themselves in google or facebook or they you know their agencies would do it for for them so that five grand is they're paying you to your software so five grand times 24 customers you guys are about 120 000 bucks a month right now in revenue yeah so we are we have some customers that are ramping up so we have we reached 1 million arr last december this december like the december last year uh and with 24 customers it gives us four to five thousand dollars that's great um so i guess if you're at like 90 000. it sounds like in january or this month you're gonna do about ninety thousand dollars right something like that yeah so we're we're still growing adding more customers every month and if you're doing about eighty or ninety thousand dollars per month today in revenue where were you exactly one year ago so one year ago we had uh around 20 250 plus uh er with four clients 250 okay interesting and and how do you so those four clients were they all from one specific niche or no no we we test a lot in the beginning so uh at that time they were real estate to e-commerce companies and one at ed tech company education technology company they're all still with you oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're gonna see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to 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 not built off random data again you guys hear these interviews on youtube all these datas are built from real time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of sas valuations and what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations 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 all right let's jump back into the interview so what are you i mean give me a back story here you have a based off your bio a lot of different things you've had your hands on what year did you launch tommy yeah so i i had always been a data geek and you know sciency guy and uh turned into a marketer and i worked for more than five years in e-commerce in leading positions in marketing and at some point three years ago i moved back to united states to new york and worked at compass in paid digital marketing and marketing technology and i spotted a huge opportunity because you know doing digital marketing in real estate is is you know it's real pain and as i said the key problem is that long conversion cycles offline and very rare conversions that you cannot use for optimization for ads google facebook and i grasped the opportunity for predictive marketing approach where you can score every website visitor in real time and use this uh scoring uh the expected probability to to pay later and tell me what year was this though when did you launch the business the first paying customer was on april 2020 and when did you write the first line of code 2020 as well uh yeah so it was it was uh on the go the first customers used the mdp solution and right now we you know we wrote the solution completely with the engineers we hired and uh now we have the cloud-based uh solution for every customer uh the same what's the total what's the total team size today how many people so we are 19 people half of the team are technology engineers people uh and uh myself yeah and tommy and then constantine you know i'm gonna ask this bootstrapped are you raised yeah so it's an interesting story i i was alone for the first uh year in 2020 and i was able to get to the first six customers and 35 uh mrr 35000 mr and uh i started to raise money to hire the team i got you know my co-founder mithy who eventually who first was the uh angel investor and then uh converted as a co-founder and uh you know first things forward we are now four times larger than uh the company was than it was alone it i mean all right just just be clear i asked you earlier you said today revenue is 90 000 bucks a month i asked you what was revenue a year ago you said about 20 000 or about 250. 22 a month in december last year okay and then go back a year back to 2020. you just said revenue then was 30 000 a month so wait so uh december 21 80 plus and december 20 20 22 and i started the business in 2020. sorry i know you just said i thought i heard you say in 2020 you grew it by yourself to 30 000 a month in revenue was that right yeah yeah by by february march and i started to hire people february two years ago in 2020 uh i started to hire people uh in 2021 in february march so constantine sorry what i'm trying to get to then these i'm missing something or the numbers you said in 2020 you grew revenue to 30 000 bucks a month last year you you said 22 000 a month so you shrunk your first 12 months in business so i started in april 2020 was running it uh alone by december 2020 i had 22 000 a month i still run it alone and i started to hire people in february march last year 2021 and by that time i had 35k rate per month i see so you went from sort of 20 000 bucks a month in 2020 to 80 000 bucks a month in 2021 that was a couple months ago to now you're doing about 90 000 bucks a month is that right yep yep i see i see that makes sense okay so just to be quick to answer my question still bootstrapped are you raised so we raised one million dollars in precede a year ago uh closing uh in april and what valuation was that at so it was a plain uh six mil was money save okay and did that looking back do you regret that or was that the right deal for you at that time so we could raise less because our revenue grew really well and we still you know uh didn't spend even half of the money uh but you know i believe you know you should raise uh more than you need all the time in order to not you know not to be in a position when you strive for new funding constantly how much of that money is still in the bank today more than a half oh wow so more than 500 grand sitting in the bank today that's great are you looking at raising more capital now yeah we are raising money right now uh we want to raise the seed uh up to five million uh okay and what what valuation assuming you get exactly what you want what valuation would you love to raise at so if i get a an offer from a reputable firm for 30 post uh manipulation i'll be happily you know i will have to so five on a 25 free or 30 post or you're selling approximately 15 percent of the business buying from 30 posts yep 5 on 30 posts you'd be selling about again 15 of the business uh honestly what you're asking for is market i mean right you're asking for a 27x valuation multiple above the 1 million are doing right now why not ask for more why not go bigger i mean it's uh you know we have really you know high interest and we have about a half of the round already in soft commitments looking for a lead investor and if you have competition it can be higher would you you definitely want to sell equity here i mean as you know we have a fund but it's not equity it's debt would you ever look at funding some of your growth with debt so you can keep equity or no well that that is tricky so you can you know it might look better in the beginning but it can uh be a drawback in the future so what are some ways what are some ways it could be a drawback in the future it sounds like you have some experience with this i mean uh with uh equity you get smart money so actually not only get the money you get the connections of investors some help on the way forward for the future rounds and with debt you never know how it goes and equity is more uh protected from the downside this is all true obviously just giving it more equity i like to think of myself as a as debt but also very strategic uh i.e the reason you wanted to come on the show we should talk about if you wanna i'm just going off metric you've already shared with me founder path would probably spit on an offer for you of which is eventually our capital right probably 500 grand and you're growing healthy with a pretty good profile in terms of expenses and you have good cash balance of 500k already we'd probably give you 500k and let you pay it back over two or three years um at a fairly competitive rate it wouldn't be bank capital cheap at like six percent but it wouldn't be like clear co company expensive at like 30 at least like 15 something like that yeah thank you for the offer it's already a great uh you know uh value from the call from 15 minutes call yeah we'll i'll we'll see what happens but i like what you're doing i just wonder how you think about preserving equity over the long term have you had a company in the past that you've sold where you did raise from vcs well no it's so it's my first uh company and uh before that i was in executive roles on the large companies like pre-ipo companies yep yeah well it sounds here you're doing you're doing the right things you're growing nicely which is great to hear talk to me a little bit about about churn right so are these um what is your net dollar retention over the past 12 months yeah so uh we had six customers that are uh more than one year so it's you know really hard to judge what is our churn uh and most of the customer base came within the last uh six to nine months uh what's important so we run a pilot project with our customers to prove the value to them and we get and expect to get uh two-thirds of them to convert into uh recurring uh permanent customers and uh by far we estimate that our children should be like around one two percent per month for those customers who you know converted from a pilot to a yearly contract understood and in terms of signing up these customers right they're 5 000 a month customers what are you spending on customer acquisition costs to get them yeah so we spent very little on marketing so for q4 last year we spent only four thousand dollars on linkedin facebook twitter uh we invest a lot into uh uh outbound uh called out one uh sales uh we also believe that uh our next two channels to chase for our content marketing for inbound strategy to generate interesting content for decision makers and to get their attention and eventually get them as warm leads and the second channel that we believe in is the event-based marketing so going to events conferences and uh talking to the decision makers then they are ready to talk so in our industry you know the upper funnel part is really tricky because it's very crowded in marketing technology space but whenever we get to a call uh whenever we show a demo of our product we get a conversion into a contract for like 20 percent of our conversations yeah that makes a lot of sense now if you look at your total expenses not just marketing expense right total expenses if you're adding you know one customer a month or something right what were your total expenses last month and could you get into a fully weighted cack that way uh yeah so we but our gross burn is 130 a month okay 130 000 and uh our target uh cost on sales is 40 of the revenue a first year revenue um yeah i got it so if someone so if someone's going to pay 60 000 in the first year you're willing to spend up to 24 000 bucks to get that customer but you're nowhere near that right now yep that makes a lot of sense this is a great story constantine let's wrap up here with the famous five all right yeah let's do it all right number one favorite business book uh 0-1 number two is there a ceo you're following or studying yes uh daniel perkaski my former boss from ozone i i adore his leadership style and customer obsession number three what's your favorite online tool for building tommy uh similar web amazing tool i was one of the customers in russia i love it so just to spy on your competitors and many more things are you based in russia right now no i'm in politically for me uh okay okay can i ask a sensitive question because it's relevant with events currently happening does this impact you at all like putin you cram does this impact you at all since you're from russia i mean probably not right well it bugs me a little bit but we are we're a us-based company delivers corp and russia is a very really small part of the global uh market technology and online marketing market so it's not not a big deal for us you're not seeing anyone treat you different because you are originally like launched or based from or came from russia or anything like that right i know that again that's a tough question to ask but i'm curious you know nothing like that and there are a lot of uh russian-based founders in very well-known companies in your list actually oh i love i love russian founders i mean i think it's great i'm just curious i'm just curious how macro economic events potentially impact or don't impact you that's all that's that's an external factor you know we just live a bit and uh you know just try to do our thing and do it to the best level that's like that's a good outlook all right uh and what's your how many hours of sleep again every night uh i sleep six or less hours uh during weekly days yeah okay and what's your situation constantine married single kids happily married with two kids uh two-year-old seven-year-old oh wow today is uh my seven-year-old daughter that's your it's your birthday it's um the birthday of my two year uh old daughter like today literally oh like like you're having another kid today or today is her birthday birthday yes oh very cool that's so cool all right and how old are you i'm 40. 40. last question something you wish you knew when you were 20. oh yes i get to the silicon valley as asap guys there you have it uh tommy dot ai growing nicely 24 enterprise customers paying 5 000 bucks a month doing 90 000 bucks a month today in revenue up from 80 000 a month back just two months ago in december and up from 22 000 bucks a month back in december of 2020. healthy growth they raised a precede last year a million on a six post so a 24x multiple hoping to raise you know maybe you know now frankly their seed 5 million on a 30 pre or post would be something that constantine would get very excited about we'll see if it happens but again growing nicely still 500k cash in the bank gross burn about 150 grand a month with a team of call it 19 people constantine thanks for taking us to the top thank you have a good day 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 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