Topia Interactive Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Daniel Liebeskind. [00:02] >> He's the cofounder and CEO of topia, a platform for creative social experiences that inspire authentic human connection. He's a product developer and engineer having built nearly 30 applications over the past six years and believes that creativity is humanity's greatest gift is on a quest to empower creators. Daniel, are you ready to take us to the top? [00:19] I am. Thanks for having me, Nathan. Such an honor to be here. [00:22] >> You bet. So so talk to me a little bit. There's companies like Envoy, MIT, Opus, and Okta using topia. How are they using you? [00:29] Yeah. So companies that are using topia really are using it as a community platform. So when you think about your employees, your coworkers, you know, you if you're just showing up to meetings, you don't actually really know anybody, you're kind of just a mercenary working for a company. And so being able to actually turn your co workers into people that you know, that are part of your community that you can have social experiences with, that's really [00:53] core and critical to retention, to you know, having a good working environment. And so people are using topia to have holiday parties, to celebrate their IPOs, to have all hands, happy hours, and sort of the social fabric that makes up a coworking community when you're in person. Really hard to do with just Zoom. And so things like topia are able to step in and provide that medium for the social fabric. [01:21] >> Facebook's now meta. They're betting on the metaverse. You're like the b two b version of meta. Well, you [01:27] know, we're we've actually we've been doing metaverse stuff for the for a couple years now. And I wouldn't even say that we are entirely or even focused on b two b. For example, Burning Man, which is a big festival that happens annually, actually happened on Topia, happened last year on Topia, this year on Topia. And so we're very much a community platform businesses, our communities, you know, in a community of employees, so they're using topia, but [01:53] we also have thousands of different people that are not business oriented using topia really just as a way to evolve how they socialize online, to come together for real time experiences, and to make friends. [02:06] >> And and, Daniel, how are people paying you? What's your revenue model? [02:10] Yeah. We have a few different revenue models. And, you know, we really have two different types of users. We have first of all, we sort of have a whole creator ecosystem. And so creators are creating assets, they're creating art, they're creating programmable experiences, putting those in the marketplace, curators are creating templates, which people can then use to really easily customize their worlds. And then we have influencers, which are actually bringing people together inside of worlds and [02:37] earning money by doing that. And so people are paying us both for world ownership, and that's $9 a month. And we have, you know, a couple thousand people that are doing that. And then we have also on the B2B side, like you mentioned, people are throwing one off events and they're also subscribing to have persistent monthly spaces where they can have all hands and happy hours and check ins and those sorts of things. So there's there's [03:05] a few different things. We also have community subscriptions and ticketing coming very soon. So we're adding new revenue models as we go. [03:12] >> On the B2B side, what's the average B2B company paying you per month or per year to use the tech? [03:17] You know, it ranges. The largest one off event we've we've charged is $40,000. Small ones can be a $100. And then on the recurring side, you know, that also ranges. We basically charge based on venue size. So if you wanna have a venue size of capacity of 100 people, we charge $4 per person of capacity, so that's $400 a month. I would say that's probably, you know, for a small company, smallish company, that's what people are [03:44] paying. And then you can have unlimited number of people and unlimited number of events, but never more than a 100 people at a time. But we have, you know, we have people that are have a 25 person capacity, 100 person person capacity, a thousand person capacity, so it kind of ranges. [03:59] >> Got it. How many people are paying something on the B2B side? [04:03] On the B2B side, on a given month, you know, again, we sometimes have we have a lot of one off events as well. We have dozens at this point that are paying us, but, you know, it kinda fluctuates. [04:13] >> Got it. Got it. Yeah. Ignore the one off stuff, but it sounds like maybe if you have dozens, call it maybe 24 paying at least $400 a month on the b two b side. Something like that. Yeah. Interesting. Do do you see that being the future? Obviously, everyone wants recurring revenue because then you can, you know, determine who to hire and rely on future revenue to cover their salaries and stuff, but not everything is meant to [04:30] >> be a b to b SaaS recurring model. I mean, you're having success with one off events. Are, you know, are you comfortable with that? How do you plan? [04:37] Yeah. You know, we we very much actually want to be the evolution of how people socialize. We're not really focused on the b to b side per se. I think a lot of businesses have found topia to be really engaging in a great way to bring people together. We also were very focused on our creators, right on the people that are actually creating these experiences that are curating experiences that are bringing people together in worlds which [04:58] we call Confluencers. And so we're actually paying 30% of our revenue out from the B2B side to our creator ecosystem. And that's one of reasons that we're really stoked about all the different businesses that are paying. But I think as we think about the long term of topia, you know, we're very much a creator ecosystem and very focused on how can people have communities in these really unique social experiences and these curated and customized social experiences. [05:23] And so that's that's kind of like our focal point. Things like Burning Man, you know, are very much in our wheelhouse, festivals, gatherings, those kinds of things. [05:31] >> And so, Daniel, how much in September or October did you pay out to Confluencers? [05:37] We actually just had our biggest day. I think a few days ago, we paid out $3,000 in a single day to our Confluencers. So, you know, it's still kinda early innings on some of this stuff, but, you know, it's it's scaling pretty quickly. [05:53] >> What give me just obviously, I wanna try and avoid extremes. Congrats on a it's a hugely successful day, But if you look at us all of October, how much total an hour? Are we talking, like, $5,000 to $10,000 to Confluencers? [06:03] Yeah. Something like that. [06:04] >> Okay. Interesting. So got it. So so I can then multiply times I mean, three there. Right? You're doing something like $30,000 a month on the on the world ownership side. Is that right? [06:15] You really like getting to the revenue numbers. Yeah. So we're, yeah, we're somewhere between there. You know, it fluctuates again based on the one offs, and the one offs actually generate a lot of the Confluencer commissions at this point. Oh, I see. [06:26] >> Yeah. I see. I see. So on that largest event where you had, like, 40,000, that was that the b two b s s played, how would a Confluencer make money on that? [06:34] Yeah. So 30%. So we would basically say, okay. Here's a 40,000 invoice that's paid, and we're carving out 30% of that. And so, you know, $12,000 then gets slated to get paid out to our creators and our influencers, basically to our creator ecosystem. [06:48] >> Bring people into the event? [06:50] Who are creating content, creating templates, creating assets, and bringing people into events. [06:55] >> I see. So so you could have a big brand like Dell, who's very unsexy many people would say is unsexy and slow. Say, I want a cool factor. I'm gonna pay Daniel and topia $40,000 to then incentivize all these cool metaverse builders templates to go, like, build this cool online ecosystem. [07:10] That's right. We also have service partners. So this $40,000 event, actually, they paid $40,000 to us, but one of our service partners provided world building services, event production. We have we have about a dozen different service partners. [07:26] >> Are those the world ownership people that you said there's thousands of paying $9 a month? [07:30] No. They're in some cases, they are, but often they're actually, like, event production companies. They are a a team of illustrators, And, you know, they have a lot of different capabilities. Sometimes they can hire paid actors, you know, so you can have these live interactive events. So think of like Sleep No More in New York, if you're familiar with that, you can you can have a corporate event that's kind of like your own customized sleep no [07:54] more, which is like interactive theater. And these service partners will build the world, they'll customize it, you know, put in your, your company product videos or inside jokes, scavenger hunts, you can, you know, where you can win things. Then during the event, they'll actually run the event. They'll have the paid actors, those kinds of things. [08:11] >> And, Daniel, when did you start building the business? What year? [08:14] So this topia formally started in 2020, but I've been building platforms like this since 2015. And so it's been, it's been a long journey. I've been actually the same technology that we're using topia, which is web real time communication. We basically have peer to peer encrypted tunnels for our audio and video. So there's like an encrypted tunnel between two browsers. I was building stuff using that technology back in 2015. And so, you know, it's been it's [08:39] been kind of a journey. But this particular iteration started in 2020. We raised a little bit over 5,000,000 in May of this year from Seven Seven Six and Bonfire Ventures and and a few others. And Seven Seven Six is Alexis Ohanian, who's founder of Reddit, just as a as an aside. So, you know, in some ways, you know, the evolution of how we socialize, evolution of Reddit, community building, those kinds of things. [09:04] >> Mhmm. Would you consider is the 5,000,000 the all you've raised? So it's like your pre seed round, basically? [09:09] Yeah. It's it's it's 5.8 in total that we've raised. Mhmm. [09:14] >> And so what talk to take me earlier. So before the 5,000,000, when did you raise the $800,000? [09:18] We did that. So we hosted Burning Man in 2020. Basically, you know, Burning Man was trying to figure out how to deal with COVID, and they're shutting down. They were trying to throw their own event. We were kind of advising them on how to build a virtual world, essentially how to build a metaverse experience for Burning Man. They wound up deciding that they were going to outsource this. So we were one of the co hosts of [09:40] it in 2020. We had over 25,000 people come to the event. And this was like five months after we actually wrote the first line of code. So, know, the whole platform is pretty new. But we had over 20,000 people come to, to burning to what we call Build A Burn, which is the virtual burning man. And then right after that, you know, we had a lot of people interested trying to invest in topia, and so we [10:01] did friends and family round essentially then. [10:04] >> Got it. So that was 800,000 sort of pre seed round. And did you do that, like, on a priced a priced round, or a general note would you say? [10:12] So it was actually 600,000, and it was using Daniel, come on, man. [10:16] >> The story keeps changing. Okay. So 600,000 raised. [10:19] We then raised 5.2. So we've raised 5.8 altogether. [10:22] >> Fair. Fair. Fair. Okay. Cool. Cool. I'm the reason I'm trying to get to this is because every founder, like, when they have a their big first moment for you is this burning man moment. There's always a ton of inbound interest. And so I'm curious how you sorta, like, moved quick, you know, reduced the amount of time you were on on investor calls. Did you use a note to do that, or did you go ahead and do [10:36] >> the full price round on the 600? [10:38] Yeah. We just we just did a note. And, you know, we actually did the whole thing in, like, two weeks. Yeah. Was really fast for for that for the note round, for the friends and family. And then the the price round, you know, we were really we I talked to a lot of different VCs. We were really trying to find somebody that was spiritually and energetically aligned with what we were trying to do and understood what [11:00] we were trying to achieve. And we're going to try to like, you know, push us down some path that didn't make sense for, you know, for our values, for our culture. So when I met Alexis Ohanian and his team, Katelin Holloway as well, I was another partner at Seven Seven Six. Yeah, I was just like, okay, these are these are the perfect investors for us. They totally get what we're trying to do. They have deep experience [11:20] building Reddit, you know, which is a platform that I have a lot of deep respect for and, you know, investing in just a lot of experience and connections. And so when, when, you know, when we actually made that happen, you know, it was kinda like sparks flew and let's make this happen. [11:36] >> That that makes sense to me why you two aligned in terms of, like, an energy level. Most people are most founders are selling somewhere around 20% of the business in their seed. Were you around that same amount? Yeah. Around there. Okay. Then do you do you ever do you ever did you ever consider, man, this is gonna be big. I want full flexibility. I'd prefer to bootstrap. [11:54] Yeah. You know, bootstrapping is is definitely a path to go. You know, I think if you're gonna do that, either you need to have a founder that's already had a big exit and has the capital to bootstrap, or you need to really focus on how to make, how to maximize revenue and build a sustainable business right off the bat. And while we are, you know, we had revenue within our first six months, that hasn't been our [12:16] core focus, you know, really for us, it's building a product that people love, and that is building a network, allows them to come together. Revenue has been, honestly, you know, one of the reasons that we focus on revenue at all now is so we can pay out our creator ecosystem. [12:30] >> Yeah. Yeah. [12:31] That makes financial independence. [12:32] >> What what was like, to boost that ecosystem, obviously, then you bring in network effects. Right? So how low was revenue in 2020? Mean, most of it was probably from the Burning Man event. Right? But are we talking, like, a $100 of revenue or something like that? [12:42] Yeah. It was it was even less than that. I think in 2020, we didn't actually turn on revenue generation capabilities until something like, you know, August or September. It was right before Burning Man. We even let people subscribe at all. And so it was And when you [12:57] >> say let when you say let people subscribe, like, does that mean they're they're trying to buy worlds at $9 a month? Their world builder builders taking 30%? Like, what are the models where you did you open up? [13:07] Yeah. So the first one was was world ownership, essentially. So that these are these are unique URLs. It's kinda like real estate. So if you want topia.io/nathan, then you pay $9 a month to have that. And you have unlimited people that you can bring in there. We have huge amount of scalability. So we don't like cap the number of people at a time. We've had people bring thousands of people at once into one of these worlds. [13:27] And that's just $9. And so that's that's what we opened up first. You know, we have thousands of people paying to have worlds that they own. And all of these commissions Would [13:38] >> you say this year, this is gonna be your main revenue stream? Then it's gonna be this $9 per month world ownership concept? [13:42] No. We make we make way more from our business side than we do from the consume what what is more like the Confluencer side, the world ownership side. [13:52] >> Okay. Okay. Interesting. I mean, if you have thousands, though, at $9 a month, I mean, let's say 2,000 at $9 a month, that's more than, you know, $20,000 a month in revenue. So if you're doing way more on the b to b side, I mean, what you are you guys past a million dollar run rate yet? We're not. No. Can you break it next year, you think? [14:07] A million next year? Yeah. Total revenue. Definitely our goal. [14:10] >> Yeah. And the reason I bring that up is because it sounds like if that goes up, Confluence can make more money. So you get more creatives, cartoonists, illustrators building for the platform, and you get network effects. So, like, don't don't kill me for pushing on revenue, but I'm also trying to help. [14:23] That's exactly right. That's exactly right. And and and that's that's really the the focal point here is how do we, you know, how do we create financial independence for creators make it so that you can just, you know, you can have a full time career be just creating things that bring people together, right? Creating experiences, creating social experiences online. That's that's actually sort of the the goal and the mission here. [14:46] >> Mhmm. Yeah. No. That makes a lot of sense. [14:47] Okay. So so how I guess the main thing [14:52] >> you're tracking then are what is it? How many contributors contribute at one at least one illustration or at least one template per month? Like, what's that metric for you that you really care? I know you're not metrics. Like, you're little like an energy guy, but you have to have some metrics. Right? What's the metric? [15:04] Yeah. We definitely we have metrics. So, you know, we are looking at how many people are having conversations a week. Okay. You know, importantly, we're not saying how how, you know, what is like session duration, how long are people having conversations, because we're not trying to build an attention economy. We're not an ad based model. Right? We're never going to be. So the length of time isn't nearly as important as actually coming on frequently and having [15:29] at least, you know, one human connection with people. So we track we track that. We look at how many events are happening on platform each week, and then we look at how much we are paying out to our creator ecosystem. [15:42] >> Interesting. Okay. So how many conversations per week happened last week? [15:46] Last week, I think it was 4,000 people had at least one conversation. [15:50] >> That's amazing. Okay. And so how many events was that across? [15:54] It fluctuates. I think last last week, it was a 180 different events. [15:58] >> Wow. Okay. And then it sounds like, again, a really good day for you in terms of paid out to creators would be, like, 3 k. So maybe I mean, it sounds like you're around, like, 2 or 3 k per per week on a good week. [16:06] On a good week. Yeah. [16:08] >> Yeah. Yeah. Super interesting. Okay. Very cool. You know, I think that the most I would argue the hardest thing about this really is finding, a mousetrap to get, like, the common person understanding this. Right? Like, I get it, but I would say I'm even early. Right? Like, what do think a mousetrap's gonna be where you get millions of people having a conversation each week? [16:23] Yeah. Well, one of the funny things that's happening is we've been a metaverse company for years now without actually using the word metaverse. Right? And so it's really hard to describe topia without bringing people into it. I think that's actually getting a lot easier because now people are exploring what is this idea of real time social interaction online? What is the synchronous Internet? What is the metaverse? And so that's actually making things much, much easier for [16:49] us. But, you know, I think that the ultimate explosion in people actually having conversations is likely going to come from people just being more comfortable with these kinds of platforms, actually using them, having it integrated into their daily way of life and part of how they actually interact and have community with people all over the world, right? In many ways, we're actually bringing the accessibility to communities. We're tearing down location based physical constraints, economic constraints to [17:20] to be a member of different groups. And so, you know, it's it's my belief, I think what we're seeing actually happen around us real time is that people are are getting more and more excited about the ability to actually interact online and not just in a meeting, right, but in sort of a social free to move. You have your own agency safe, consensual way. Well, [17:44] >> I just signed up, and I'm very happy to say I got forward slash Nathan username, which I'm shocked that I got. So I'm very excited. This is great. You know what this reminds me of? This is crazy. This looks almost exactly like the, whatever, the the boring apes ecosystem they built to give value to the NFTs they're building. Do you have anyone combining and illustrating virtual worlds and you can only access them in with with NFT [18:08] >> access? [18:10] It's funny you should ask that. We we have not. This is this is an exclusive on this podcast. You know, just teasing that we are one of the one of our core beliefs is in the interoperable metaverse, the idea of, you know, if you're gonna be creator centric, we need to make it possible for creators instead of having to in, like, web so creepy. [18:29] >> I just joined this world. There are other people here I've never met before, but I see their faces, and I see their little illustrators walking around. This is very interesting. [18:37] You're probably in welcome, which is kind of like our welcome lobby. Is the URL slash welcome? [18:42] >> Yeah. I just muted myself. I'm going to I'm I'm walking through explore the Topia sign. I'm going to the private zone. I'm discovering public worlds. Art Island look in looks interesting. This is very interesting. Yep. Wow. This is like so, like, how much of your time is spent towards, like, building the next Disney? Right? Don't you need, like, amazing illustrators and cartoonists, like, create these virtual worlds? Isn't that the key here? Like, Activision x World of [19:05] >> Warcraft builder people? [19:07] Yeah. I mean, we so one of the crazy things is that we have a huge marketplace full of assets. We have, we have both topia assets. We also have community built assets and then scenes, which are collections of objects or collections of assets. So there's a ton of stuff that you can actually just pull in. And then if you want to upload your own content, you can. You also very soon will be able to import your [19:29] NFTs, verified NFTs and, you know, use those kinds of things. So, you know, just tying into this sort of interoperable public database of content makes it so you don't really have to generate your own from scratch anymore as part of this whole creator ecosystem that is emerging around us. You know, people have been talking about creator economies for a long time, but now it's actually coming to fruition. And you don't need to be an artist yourself [19:55] in order to have access to really high quality art that creators have made. [20:01] >> Sorry. If I look distracted, it's because I am. I'm walking through all these worlds. Can I, like, have an can I hire an illustrator and, like, illustrate my own little podcast booth? Kinda like this person right now is owning the little graphic stage. And when I walk into it, he's I'm listening to his music. [20:15] Absolutely. Yep. That and and people are doing that all time. So I was talking about service partners. There's also just tons of artists on platform where you can you know, where they'll make you custom art, and you can just make your world whatever you want it to be. [20:27] >> I just jumped in the pool, which is that splashing you hear in the background. So funny. I love this. Okay. This makes perfect sense to me. Like, I get it. You just have to do it. I love how easy you've made the onboarding. I feel like that's the key to getting this to work. I feel like once people are in, they're gonna get hooked. This is great. Alright. Let's wrap up. Well, actually, are you raising more [20:44] >> capital right now? [20:45] We we likely are we haven't, you know, we haven't really kicked that off. We are getting a lot of interest in raising another round, you know, we just raised, so we don't really need capital. But, you know, having more will help us to really accelerate and we are scaling the team. Our product is evolving pretty rapidly. And so, know, if people are interested, they can reach out to me. [21:06] >> Very cool. Alright, let's wrap up with the famous five. Number one, favorite book. Favorite book? [21:12] Well, the book that I just read is Snow Crash, because that's the the word of, you know, metaverse came from. I would say maybe Shantaram, though, is is probably my favorite book at the moment. [21:24] >> Number two, is there a CEO you're following or studying? [21:29] It's a good question. [21:32] You know, I I think Mac Reddin at Commsor, he's kind of an ally of mine, but also just an amazing community builder and has a has a beautiful energy. Recommend checking them out. [21:43] >> Number three, what's your favorite online tool for building topia? [21:49] Mean, procreate is is probably the number one in terms of illustration capabilities. We also have an API coming very soon where people will be able to build their own tools on top of topia. And so hopefully one of those would be my favorite soon. [22:05] >> Number four, how many hours of sleep do you get every night? [22:10] I think the healthy thing to say would be eight to nine, but, you know, it's often, it's five or six. [22:16] >> Alright. In situation, married, single kids? Married. [22:19] No kids. [22:20] >> No kids. Alright. And how old are you? [22:22] 34. Oh, 35. I just had a birthday. [22:25] >> Happy birthday. Happy birthday. You. I was October 3. When's your birthday? October 14. Oh, nice, man. Very cool. Alright. Last question. Something you wish knew when you were 20. [22:38] Wish I knew when I was 20. [22:41] I guess, you know, that you don't need to go the traditional path. One of the things when when we're young, at least when I was growing up, you know, you're told that you should be a doctor or a banker or a lawyer. One of the things I've realized now is that there's so many different things you can be. And part of that is just the evolution of the job market. And there are gig economy things, you [23:01] can be an artist, you can be a creator, you can be a manager. But you know, I wish I knew when I was younger that like, the world was way more open to possibilities. [23:10] >> Guys, topia. Hosted Burning Man in 2020 when everyone was shut down, had 25,000 people on their virtual world. They did under $100,000 in revenue at that point because they weren't focused on revenue. Now really trying to figure out how to drive revenue so they can pay more out to co creators to get better artistic talent on the platform to create better virtual worlds. Thousands of people are paying over $9 a month for world ownership, and B2B [23:29] >> brands are hosting events on here as well along with some of these folks like Burning Man. They're paying thousands out creators every single month. We'll see what happens next. 5,200,000 raise sold about 20% as he looks to scale. Daniel, thanks for taking us to the top. [23:42] Nathan, thanks for having me on here. This is really fun. [23:46] >> One 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 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 1PM [24:11] >> Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big [24:33] >> fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up [24:55] >> for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. [25:14] >> We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright. I'll be in the comments. See you.