Tribe Technologies Revenue, Valuation & Funding (2024)

hey folks my guest today is siavash mahmudian he's the co-founder and ceo of tribe a customizable online community platform serving smbs now before this he was co-founder and cto of brezio an online community software used by organizations like nasa the state of maryland and other enterprising government organizations see bosch are you ready to take us to the top of course i'm excited i'm excited you're here too so tribe.so is the link we were just sort of talking about one of your competitors circle is that the right that's the space you're playing in am i on the spot so i think like circle mostly uh targets the creators in our case like we mostly target businesses so it's a little bit of overlap on like the outcome and what we do however when it comes to the audience that we are tackling it's a little bit different so what's an example of a feature that you might build that circle would never build because you're focused on businesses and they're focused on creators so in general first of all like um the idea behind tribe is that we are a platform that is very customizable extensible and embeddable into other products so we usually like target people that already have a product that is out there and they want the community to be in the user's journey of their audience inside the product so that's one of the main differences and also when it comes to extensibility like we focus a lot on building apps on top of tribe so tribe handles all the hard stuff like feed notifications analytics moderation member segmentation and all those things and everything else is an app built on top of tribe and it's very simple for others also to customize our platform now when we go to the apps for instance amplitude integration it's something that is important for businesses because they want better analytics as an example or we can say like i don't know salesforce or pipedrive integrations where they can easily like integrate the community with their crm and also how much do you overlap with someone that's leading community out of business and that person's role is to activate community members into like trials for the actual business in other words comsource sort of playing in a space a little bit do you overlap with that kind of analytics as well so again because we are a platform the good thing about it is that somebody else can come and build an app on top of tribe and say like i want to integrate like your audience on slack or twitter and bring it to this community platform so we see like products like that as like some sort of like feature that can be added to tribe again the idea is like we should be very customizable and we want to the same way that for instance in ios there is a weather app but a third-party person can build a better better app on top of ios that's the exact same thing that we see it so we build all these integrations so we have like q a or events and all those sort of things but somebody else can build actually a better one if they want understood well look one of our heroes is nathan barry again we love bootstrappers and we know that haley chamberlain who leads content community convertkit is a big fan of tribe so i'm excited to learn more here help us understand pricing what's the average company paying you to use the technology per month yeah so we have like three different plans as we speak uh other than their free so first of all everyone can start with free up to 100 members you can do whatever you want basically and then after that we have the plus plan which is more focused on smaller businesses or maybe individuals who have like some sort of course and those sort of things so creators can actually kind of land in that plan as well then we have the premium plan where it starts from uh like it's around like uh 200 190 vermont so uh in that plan usually it's four businesses that one single sign on and more into how many members can they have uh they can have like under plus they can have up to ten thousand and on premium they can have up to a hundred thousand and if you are bigger than that 200 bucks a month for that yeah yeah i see that feels really cheap if i'm running a community with a hundred thousand people in it i'm like ibm and i should be paying you like 200 grand a year not two grand a month if you're in ibm you will need some of the apps that we have for instance you need like actually ibm is a customer so we have like five or six deals with them uh and in those cases usually you want like saml integration and higher like security level so the the pricing is not only limited by number of members it's also the use case so there are some apps that are available on like different plans that you can actually uh utilize those got it number of members and also application access and so with those kind of upsells siobhash what's the largest customer paying you today what's like your highest acv is it like 100 grand 200 grand yeah it's around like more than 100 grand is wow cv okay really interesting give us the back story here when did you launch the company yeah yeah so we launched tribe actually three years ago the story actually starts i mean i'm a technical ceo at tribe started programming when i was like nine or ten how old are you today right now i'm like 33. okay so um yeah i've built actually a dating app i'm originally iranian i built a dating app back in my home country it was used by four hundred thousand people and um i was that means you're married did the dating app work on you are you still single well i didn't find my sponsor you can't find true love through that but actually i found like two of my co-founders through the next uh app that i've built but the funny thing is that i was underage to use my own app i was like 17 and then i needed to be 18 for the dating app they built like this yahoo messenger where it connected like experts to yahoo messenger together it was a chatbot and i found actually my co-founders through that so i know them like from a long time ago so what year did you officially launch tribe though 2018 so we launched tribe at the end of like yeah 2018. and then the idea was yeah so the the story behind it was that um well i immigrated to the states like around like 10 years ago or a little bit more than that and um well one of the companies that i founded there was brisio as you've mentioned and the initial customers were like larger organizations at some point like it became like a custom shop for these large organizations because when nasa comes in and says like we want this little button somewhere like it's really hard to tell them so it was more like an agency then [Music] it's still a startup it's still active actually and um well but it's not as easy to change it for the need so the thing is that every single community is unique and we talk about that a lot and like you can be like similar to classroom and like i don't know a church and uh i don't know a meetup where you need like different venues and different setup for it communities is exactly like that online communities is like that as well so you need like different environments and what i learned at brisio was like if you want to tackle this market we must be a platform so it is customizable so people can actually customize it to their needs if they want and the other thing was like it should be embeddable because um well you have already a product you don't want for instance to have like this community platform and then your products to be separate things you wanted to be inside that so that's the reason that we built actually tribe around three years ago with my two co-founders basically got it and now when you launch did you guys split equity equally or no state what equally equity oh equity yeah so when we launched yeah of course uh it's the equity with my co-founders so 33 33 33 so it's almost that okay okay well you have like 10 percent on like the esop for your employees of course and then yes the equity is almost split it's uh like similarly i see and did you so your esop pool is ten percent now have you guys bootstrap or did you raise capital so initially we bootstrapped um basically we did raise a precedent round but it was just to get some of our friends that uh we thought like should be involved in how much was the shopify and all those things so the the pre-seed round was insignificant was very small in general and it was a convertible note but what's small though i mean are we talking a hundred thousand or five hundred thousand or whatever yeah some hundred thousand something okay okay yeah but then um well we faked a lot of things on the first version of tribe now we built like the new version so in the first version of tribe um we basically had an app store um excuse me oh see hold on let's go back to your product in a second let me stay on the equity just for one extra thing here so you do you did the hundred thousand precede to get things going you're faking a lot of stuff before you rebuilt it now did you do a more recent round or a hundred thousand all you've raised no we did another round as well so the hundred thousand round to be honest like when we raised like our pre-seed round we already had money we didn't need money and we when we raised our seed round last year um we had like 500 grand in our bank so we didn't you use that precede again we didn't you need money at that time the reason was just to involve people yeah then our seed round was led by bessemer and crv it was a 7.5 million dollar uh seed round basically and that was last year that was last year yeah i see so 7.5 million raised and what valuation did you guys target on that well it's not public uh is it okay if we don't share it yeah you don't have to share it um i just always you know you know i i don't want to promote on the show people just raising capital at all costs because then you end up slaving for 10 years maybe with the opportunity for upside in the future so i am curious how you think about dilution yeah of course actually it's okay let's actually share it so you raised uh yeah it was on a 43 million dollar post money valuation 42 posts so you guys sold what about 20 20 of the company around 20 yep yeah and did that feel right to you at the time yes i think uh it felt right and the reasoning behind it was again we faked lots of stuff now we wanted to build real that you admit that by the way i love that you admit that you faked a bunch of stuff i think that's great of course like we had like app store and the app stores technically were like feature flags where you can enable and disable apps like so it's like it's like it's basically a wait list like do you want the intercom app and if your weightlifting's got big enough then you actually build that app actually we had 50 apps on the first version and interestingly 33 percent of it was built by our community like actually our community translated the first version of tribe into 33 different languages why can't i see that well i can't see that when i go to your apps page right now i see google analytics question and answer this because right now it's the new version so we launched our new version a few months ago but on the first version like we had like 50 apps basically i see yeah okay so you eliminated it you eliminated a bunch of them then so we rewrote the whole thing from get go because we wanted to become a platform first company no i see i use i usually don't do that just like rebuilding the whole thing you usually like take things out and then replace them one by one but the idea was like the first version was to just get to promise market fit building something that everyone actually loves to use and we got that like many people want actually a platform that is customizable extensible and and like being embeddable can can you quantify that how many customers are you working with today yeah of course like we have around like a hundred thousand communities built on tribe so far uh and every single day we have around like 200 300 new communities being built on track those are free signups which is great though how many are paying so we have uh around like uh a thousand paying customers right now as we speak that's not horrible i mean that's a one percent conversion rate from premium to paid that's not bad yeah and to be honest like it will be way bigger than this in the future again we faked a lot of stuff right now the product that we have out um well it has all the infrastructure and everything to build apps on it now it's the time to just customize it release like new themes like making sure we have we can actually build presets similar to notion and mirror so people actually can start their community very simply and see if i can i do the math there a thousand communities paying 200 per month would mean you guys are doing about 200 000 per month in revenue right now kind of yeah it's very close and where were you if you're around there today where were you exactly a year ago do you remember um a year ago i think we're at like 800k like um i think like 700k 800k in a arr got it so maybe 60 thousand dollars from so you've more than 3x to year over year yeah i mean hopefully next year with 5x yeah that's incredible and now take me back one more year into 2019 do you remember what you finished 2019 with revenue i think like we were like very small like the almost insignificant uh thing so the funniest story is that when we co-founded tribe actually from no product so we had we didn't have anything it was just an idea i built like the prototype in two weeks and then my co-founders started selling and marketing it and in four weeks after that we had actually fifteen hundred dollars in revenue which in monthly so five customers who was willing to pay us like 300 a month in like six weeks and we didn't have a bank account so then we actually co-founded picked a name co-founded the company and collected the money so the growth between 2019 and 2020 must have been impressive because you're basically you know eight hundred thousand dollar run rate but you raised it a 42 million dollar valuation i mean that's like a 50 x multiple so it's very high yeah yeah the multiplayer was very high that's you can say that's really good or really bad you're either now you have to grow into the valuation to avoid a down round but also it's a great partner and it's a lot of money to invest to be honest like um we wanted to raise like way less than that but um actually we had like eight term sheets we closed the whole round in two weeks so it was a very nice story i i think i had like around 130 meetings in that two weeks basically so uh back to back 30 minutes meetings and without like covet i think that wasn't possible because i had to like fly around and do all those things so yeah um are you guys raising right now um right not right now we have enough money i think uh we want now the product market so again we had the promise market fit we have something that when we show to anyone they want to buy it and they want to use us and they cheer for us but i think the product we need to build all these apps and all those things before we get uh we get to our next round basically that makes sense talk to me a little bit more about how you've structured the team how many are full-time today so we have around like 37 people okay how many engineers half of it is engineers and products okay that's amazing okay so call like 15 20 or engineers what are the rest do so we have like cs team and sales team we are an inbound company in general we don't have any outbound and people and believe it or not like say 60 70 percent of our reach is organic you don't pay anything for it what does that mean though when people say organic to me what i hear is that people don't understand how they get it so they just call it organic how are you driving organic is it a powered by content content strategy so you search for community platform like you're we're there at the first place mostly in most companies countries like number one alternatives to facebook group all those things so we rank pretty well we we spent a lot of time writing really good content and the content are like content that i mean i really believe in like i use it so it's not just uh generating content it's generating like really what about webinars you guys are doing a lot of webinars yeah we do webinars as well we did one with richard millington another one with like it like the next one is with juno bacon so we were doing like lots of those as well those are very good how many people sign up on average for the webinar around like thousands and how many actually show up around like uh three four hundred so yeah and then what do you do on the webinar with them uh well it depends on the subject of the webinar basically so uh and also the guests so mostly we just facilitate the guests and the idea is like building a community is like 10 around technology it's 90 percent around like building sense of belongingness and all those things right so we need to educate our customers as much as we can and these webinars are for education we don't look at them as lead generation we look at them that we want to educate we want to actually make sure everyone understands like what's the value of a comp community for a company and how what's the call to action at the end the last three slides do you sell them on something they book a demo what's the call to action yeah usually it's like if you need more help like book a demo or things of that sort we also promote our guests if they have a book or something they can also promote that interesting churn's critical in a sas company what is your guys's churn look like today so again because we have a promised market fit and not a product market fit um we have like um i would say um it depends on our plan but on enterprise almost we have a plan called enterprise as well uh i think we were caught off there it's for larger organizations for instance like asus like ibm pipedrive convertkit and all those sort of like customers that you have like tim hortons uh so for these customers the channel rate is very minimal almost like i cannot say zero percent but it's very very minimal uh because when you look at revenue churn though across your whole base trailing 12 months what would you say that is gross revenue churn annually so um rights now actually it's pretty high if you get it like for everyone it's like around like 30 percent something like that um and there are many different reasons most of it actually comes from our plus customers which are like kind of creators that's another reason we're focusing more on businesses because for plus for creators though the 30 percent churn you just told me that's not logo turn that's revenue churn correct that's revenue yeah okay do you have expansion revenue that makes up that 30 percent journal yeah another thing is that uh the in the first version of tribes like we didn't have that much of expansion so you could just change switch between the plans now in the new pricing we have uh the an exact expansion that we are actually trialing which is like the number of admins that you have so we will actually expand so it depends the reasoning behind it is that larger companies will have more admins so if you want to see like read for instance internal notes if you want to see like zendesk tickets next to like these discussions if you want to have like that sync between like salesforce and other stuff right so the idea is like the people who have access to these are considered as seats and you're going to expand based on the sea do you have it because it's not gonna yet or is it too early yes we do have expansion actually many of our customers actually start with more seats than uh the limits that yeah so we wouldn't quantify that though what was expansion over the past 12 months so well i i cannot give a good number to you because we just launched our new version a new pricing so it's like three months of data but right now with the historical data that we have the churn rate is way less on the new product uh so that's a good sign and you know what net dollar retention is yeah of course yeah so our net retention right now is uh lower than 100 percent which is a problem that we are fixing that's cool that's why i'm digging here right yeah that's got to be a big red flag but you guys are working on it yeah i mean i mean the version two the whole point of it well you cannot get above net 100 net dollar retention when you don't have expansion because the only thing you already said you already you already told me though that you upsell based off number of members and number of apps and now you're adding on a number of admins to give you more leverage to drive expansion correct correct but in each plan the idea is that you should be able to expand under each plan so in the previous version when you were on plus the only way you could expand was go to premium right so that was the only way you could expand which does not like make a ton of sense the idea of the new product and the new pricing is that under each of these plans you should be able to expand right so if you're on premium you cannot stay on premium because that's your persona you're a business you're a small and medium-sized business right and then as you grow in the size of the company you will grow with us so that is the idea as you get more value you will actually get that and that is the idea that's why i'm saying that the previous version didn't have expansion because you don't change persona that often like don't become from a middle-sized company to a really large company that often and for that reason i mean we knew that this is a net dollar retention is a problem and with the new pricing we think like we can actually fix that and become like more than like 100 10 120 percent and that's another thing that we need before raising our next round i would agree i would 100 agree uh the highest multiple like in the seeds like based off the interviews i've done the past like three weeks the folks that are getting the highest multiples on their series a rounds are not the ones going revenue the fastest it's the ones that have the highest net dollar retention you know 121 30 percent so i would completely agree with that before we wrap up here what does your family think about this so interestingly the first users of that prototype that i talked about were my family so it was my mom my father my spouse like the first users that used it and it was initially a q a site about something that we thought like was cool so we started with that and to give you an idea my father can barely use the remote control uh for the tv so he's not tech savvy at all like he's not but he was actually getting in and typing with the ipad on all those things so when i saw like hey the prototype like my father can use it i was like okay now i i i it's working so yeah um they are um i believe super supportive um my wife actually was the first employee of the company just amazing so and she's still with us uh she handles like uh she's in the customer success team and helping us a lot with their product so the cool thing is that initially um ellie my wife uh in the cs team when we had i think the closest loop between customers and product engineering because my wife was there and then there were some days that hey hey you're literally sleeping with that feedback loop yeah yeah yeah yeah exactly exactly yeah that's funny so the the idea was like hey i won't talk to you on until you fix this bug so this was like a very interesting initially it's a little bit hard to uh many people ask us like how do you work uh with your wife like is that for us right now is easy it's a little bit hard to learn from it and there is she is she's there in your same room at her desk no in her in her room so we have like two offices yeah so this is like my office she has her own office i think he's a customer right now this is a great story we're out of time though let's wrap up with the famous five number one what's your favorite book so my i really like homo sapiens yeah so that's yeah and anti-fragile that's another one number two is there a ceo you're following or studying um of course like the the i think most common one is like elon musk so i'm looking into like uh what they're doing uh that that's um i think that common answer number three what's your favorite online tool for building tribe besides your own for building what for building the company for building the company okay the favorite tool i would say i really like what notion is doing no number four how many hours of sleep do you get every night depends um like from four to six okay since we know you're married you're 33 years old do you guys have any kids no that's no kids all right last question what's something you wish you knew when you were 20 um i think when i was 20 i think that's a very good question a lot of things does not matter as much as we care for like that that's i think like we take things really hard and really seriously but the idea is like how can we have like the most amount of impact in this world and if you think about that thing like you won't get sad about anything i think guys a community management platform for a businesses launched in 2018 they broke 60 000 a month in revenue exactly a year ago now doing over 200 000 a month in revenue raised 100 000 from their friends and family in 2019 before doing a 7.5 million dollar seat at a 42 million dollar post money valuation in 2020 now scaling they wanted they got promise market fit is what they call it now working on product market fit serving over a thousand customers who pay on average 200 bucks a month seavosh thank you for taking us to the top of course thank you so much for having me here one more thing before you go we have a brand new show every thursday at 1 pm central 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