Troove Revenue & Funding (2023)

[00:00] Guys, troove.me is trying to help students find that perfect college easier, not just get in, but also get out with a great job, a great experience, etcetera. Got started coding the company or building the company in 2020 right before COVID. Now to date, he's got 12 customers signed up about to get active here after Labor Day and their first cycle of recruiting. Each customer paying on average 10 to $15,000 per year. He's just trying to get [00:22] early proof points to start scaling from here. Couple 100,000 raise in a seed round from some angel as he looks to continue to grow. And what I love about this is he's eating his own dog food. He's building this because his daughter had issues with her college admissions experience. Hey, folks. My guest today is Dave Hurwitt. He's an innovator. Over the course of his career, he's led the development and launch of new products and services from [00:41] tooth picks to wind turbines that's that have generated well over $1,000,000,000 in sales. Today, he's launch launching a company called running, excuse me, company called troove.me, which helps students match with their perfect college. Dave, you ready to take us to the top? [00:56] >> Absolutely. [00:57] Alright. I almost said I had to turn this interview down because you're joining from Charlotte, and I'm a hokey there in Blacksburg. So we'll [01:05] >> Well, the the the savior is the it's Charlotte, Vermont. [01:08] Oh, amazing. There we go. That's perfect. Okay. [01:10] >> Nobody hates UVM. [01:13] Alright. So how did you I guess, first off, how did how did an executive like you end up in a company like troove? It sounds like you'd have really done anything you wanted, but you were selling whirlpools back in the day. Why not stay in that space? [01:24] >> Yeah. You know, I spent my whole career developing new products and services, and it's just kind of how my brain works. I I look at how something is working, how it's serving a market, and I iterate around it, and I just can't seem to turn that off. So when I came into the college admissions market as a father, I started looking at the deficiencies from both the student side and the school side and just couldn't help [01:45] >> myself. This is a market in desperate need of total transformation. [01:50] Okay, so you're just to be clear, you are the Founder of the business and you launched from your own personal need? [01:54] >> Correct. [01:55] Okay. That's great. When did you launch it? What year? [01:57] >> 2000. Right before COVID started. [02:01] 2020 or 2000? [02:03] >> February I'm I'm sorry. Yeah. February 2020. Yes. [02:07] So you know about a COVID that I don't know about. Okay. Launched in 2020. [02:11] >> I think it just feels like it's been so much longer. [02:13] >> Yeah. [02:14] So what was daughter, son? What? [02:15] >> Daughter. [02:16] Okay. What was the pain point? Like, you were sick of paying $200 application fees? I mean, help us understand the pain. [02:22] >> Yeah. No. So, you know, she was a kid with within the system that had relative privilege, She had two parents who'd gone to college. She had a decent high school guidance counselor at her public high school. We hired her a private guidance counselor to help her through the process, and we put together a list. We drove her out to the middle of nowhere in New York State to visit the first school, and we drove onto campus, [02:43] >> and she said, no. No. No. No. No. I'm not even getting out of the car, dad. This is the wrong place. I said, well, no. You're you're getting out of the car. But let's let's go tour, then let's talk about it. Right? So we went and had the tour, got back in the car. I said, alright. Tell you what, you jump on Spotify and improve the mood here with a better song. And I'm gonna jump on [03:02] >> Yelp, and we're gonna find a great place to have dinner tonight. We're gonna talk this through. And Spotify and Yelp nailed it, right? And it occurred to me that their matching algorithm is so much more sophisticated than how we were trying to make this $250,000 decision about where to go to college. Yep. So if you if you sort of go from there and say, the biggest part of every school are the graduates of that school. They [03:24] >> are the people that have achieved the success that every incoming freshman is looking for. And if you look at the statistics, it's really the problem in America with college is not getting in, it's getting out. The average acceptance rate is about 70%. And I know that the, you know, the Harvard's and MIT's dominate the news at, you know, 3%, but they're a tiny fraction of the total market. And so for most kids, the problem is, where [03:49] >> do I go? Because I can kind of get in where I want to go outside of a very narrow band. But then if you look at the four year graduation rate, it's forty five percent. It's basically half of all students will transfer or drop out from the first school that they attend. So we really wanted to refocus instead of this thing about getting in, it's about getting out. How can I find the place where I am [04:11] >> most comfortable academically and socially? Because that's where I'm most likely to stick it out and be successful. So that's what our software aims to do. [04:20] And how do you make money? For the school pays you or the daughter pays? [04:23] >> No. Right now, the model is the school pays. Schools are collectively spending about $15,000,000,000 a year on advertising, marketing, and admissions costs. And this is a system that is profoundly unequal, right? There there is significant advantage to the kids that have money, who have family history of education. And so I really there's a very much of a mission orientation for us to say, how can we use technology to level the playing field? Not only for the [04:49] >> students, that don't have the means coming into the system, but also for the schools that are sort of in that middle and lower tier of, of access and and of financial stability. So Dave, what do the schools what do they pay? They pay us a service fee in order for us to have them on the platform and to let them use our matching technology. [05:08] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [05:32] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:56] get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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 [06:18] 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, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [06:44] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All We're right, gonna go back to the YouTube video here in a second, but [07:06] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into [07:32] the interview. So okay. So there's no unit based upselling number of of of kids placed or something like that? [07:39] >> No. Right now, we have just set one flat fee at kind of a crazy low price, honestly, to get started and get some traction. [07:46] Which is what? [07:48] >> Well, I'd rather not get into the specific price just for, you know, competitive reasons, but it is a small fraction of an admissions budget. Admissions, you know, typically the average fully loaded cost for one enrolled student at a private college is about $2,700 to $2,800 bucks to enroll one student. So, you know, if you're trying to school, trying to enroll a thousand students as freshmen is looking at almost a 3,000,000 budget, and we are a tiny fraction of [08:17] >> that. And we're really looking at Honestly, [08:18] that's a Dave, this show is like heavy heavy on economics. So I understand if you don't wanna give a specific number, but guide us a little bit with a range if you could just to get us in the right headspace. [08:27] >> Sure. Yeah. Yeah. We're we are probably in the, you know, 10 to $15,000 range where we price it in a way that says [08:35] Per per month or per year? [08:36] >> Per year to Because start if I if I look at that budget right now, most schools spend about 10% of their budget just buying the names of kids and plugging them into their spam models. Yep, yep, yep. Yep, so that that model affords a certain amount of pricing. As we progress the product, we're going to be able to significantly raise that average price because we can displace all that junk mailing with better fit technology. [09:03] Dave, you're pricing guy though. I mean, you've sold a lot of stuff from toothpicks to the the washing machines. Yep. Mean, I aren't you cutting yourself off at your knees a little bit by charging a flat fee for every college when one college might only enroll 50 and another one might enroll 5,000 and they pay the same price? [09:20] >> You know, potentially, but my biggest problem right now is trial. There is a lot of incentive in the current system to just keep doing what you've been doing. And so looking for early adopters, I did not want nor do I quite frankly need price to be a problem. I don't need to squeeze every penny out. I need to get as many schools trialing this as possible because there is a small fraction of any market from toothpicks [09:43] >> to turbines that are willing to go first. [09:46] So, Dave, why not make it free? [09:48] >> Three. [09:49] Why not why charge at all? Why not make it free? [09:53] >> Because we have to prove that people are willing to pay for it. The ambition here is to start out by building some of that product market fit, demonstrating that, proving that people will actually write checks for this and they value it, and then turn around and probably do a raise, an institutional raise in the next year or so. [10:10] Okay. And are you bootstrapped today or have you already raised some pre seed seed funding? [10:14] >> We have only raised Angel Capital at this point. Pretty tightly bootstrapped. [10:19] We like capital efficient. So what raised under 200, under 300 ks? [10:23] >> A little bit more than that. Okay. But, you know, we've done a good job with that, but we know we needed to build the product and we are three and a half years into it. We've got about a dozen schools signed up at this point. [10:37] Are They're trialing or they're active? [10:40] >> They're active. [10:41] Oh, that's great. Okay. So I mean, can we define active as you've placed at least one enrolled student at those schools? [10:48] >> Well, for most of them, they've signed up in the last few months and so they're heading into the enrollment cycle that's about to sort of kick off, generally speaking, after Labor Day. We're getting those guys in place and the thing they get from us is the ability to use our matching quiz, right? So we help, we administer our quiz with their recent graduates that helps to build their specific school code. They then use the quiz in [11:14] >> their marketing. So they're out there sending email messages to prospective students saying, find out, you know, how much of a hokey are you? How much do you have in common with, the Tar Heels? Mhmm. And and you can take this quick quiz, and it'll return to you some data about your social fit and your learning culture fit, with each specific school. [11:34] Understood. What what made mean, that's a long time to work on the MVP. 2020, 2021, 2022, first, you know, customers being onboarded now. What made this so difficult to build? [11:45] >> Well, COVID didn't help. Yep. And the fact Actually, actually, did COVID hurt you? It should [11:50] have helped you because people don't wanna go do the in person visits anymore. Shouldn't a virtual app like what you've built help in COVID? [11:56] >> Yeah. From from a market standpoint, it definitely I think everything has been leaning and continues to lean in our favor. I mean, affirmative action changes. There's some other privacy changes happening with the SAT that that lean in our favor as well. So yeah, the market trends definitely continue to work in our favor. How it affected us raising capital, not being able to do that in person, being able to put together a team of engineers. We outsourced [12:22] >> a lot of that and just to be able to see [12:25] many are full time today? [12:27] >> We only have three full time today. [12:29] That's great. Okay. So low cost base. How did you find the agency to trust with the early code? [12:35] >> One of our investors so, you know, Burlington, Vermont's a fairly small tight community. The the the most successful SaaS company out of Burlington is a company called dealer.com. And so I went in search of dealer.com folks. I see. Within Burlington, you're only a few degrees of separation from any one of those guys. So I was able to meet and build a relationship virtually with one of the co founders of dealer.com, which went on to exit for [13:05] >> about $1,000,000,000 initially. He was their CTO who turned into their CEO, and he's led the product development side of the business, not technically as a founder, but he has put money into the business. [13:17] You're sole founder, right? Besides this guy? [13:19] >> Correct. Correct. Yeah. [13:20] Okay. [13:21] >> So that's from a from a, you know, speed standpoint, it's definitely had an impact. The fact that I don't come from the college admissions business. I'm not a coder. I needed to build all that expertise, really sort of make sure that I was having us build this on a solid foundation of customer needs. And so I had to get to know the students, the schools, the independent counselors, the high school counselors. There are a lot of [13:43] >> voices that needed to be heard in this process to make sure we weren't just building something that some guy, from outside the industry thought was a cool idea. [13:51] Well, Dave, how did you mean, look. There's a lot of folks in there, you know, I'm I'm guessing your age. There's a lot of people in their thirties and their forties and I appreciate that. Fifties. But, yeah, thirties and forties. But, like, they're going, man, I can't start a company. I've got kids. I've got expenses, etcetera. You've managed effectively to have no revenue for two and a half years and still take a risk on the business. [14:09] I mean, what advice would you give to others that are sitting in a cushy corporate job really wanting to leave and launch their own thing? How should they think about their risk profile? [14:17] >> Well, it depends on what your priorities right? You can either get to my age, which is, you know, just past the 40s, but where you say look, live well within my means. This is something that's important to me. I have a very supportive spouse, so we communicate clearly about that. And this is something honestly that I've been talking about for a few years, and she finally said, look, you need you have to do this or you [14:41] >> have to shut up and let's not talk about it anymore. And so we definitely prepared financially. We definitely have pushed a lot of chips to the center of the table and be willing to take that bet. But I am sort of an eternal optimist. I'm a glass half full kind of guy, and and I believe this is gonna work. And if it doesn't work, I I will have had an amazing journey and and learned a ton [15:02] >> and built relationships, and we'll go figure out what's next. But but I'm highly confident that that we're onto something special here. [15:08] What do you need to see in the next twelve months for you to go, yep. I'm in it for the long haul versus I gotta kill this thing. It's just not gonna work. [15:14] >> You know, we're trying to get to, you know, thirty, forty kind of schools. At that point, I think there is a healthy market for institutional capital. [15:24] So that's like $300,000 to $400,000 in revenue, something like that. [15:27] >> Yeah, probably. And I just, I think at that point we have enough critical mass and I'm not going to sit and just wait because there's no, I think that's an important point too. There's no rule book, there's no sort of these are the rules of the game and says if you get to 30 customers or 300 or $400,000 of revenue, you're guaranteed the next step, right? There's no sort of we give you the key to the [15:48] >> next step in in the game here. It's not that way. I just think that if we build enough momentum, we get through enough of those early adopters and start to get other people and some momentum coming to us, there is incredible opportunity to move even further into this where we actually kill the entire junk mail model and and disrupt that whole side of it, which which gives us access to an addressable market that's multi multi billions [16:12] >> of dollars. That is essentially the gateway to the trillion dollar higher education industry. So there's an amazing opportunity and it's really accelerated in the last nine months, I would say, with AI, both generative and predictive that impact us. And so I'm excited about proving that we have something special, that people are willing to pay us for it, and that there is actually even better stuff ahead that just requires a different capital basis than I have right [16:37] >> now. [16:38] Alright, Dave. On that note, we're out of time. Let's wrap up here with the famous five. One more answers if you can. Number one, your favorite book. [16:45] >> I would say, Where You Go is Not Who You Will Be. It is a book about college admissions. [16:51] Number two [16:52] number two, is there a CEO you're following or studying? [16:58] >> Not one person per in in particular. No. [17:01] Number three, what's your favorite online tool for building troove? [17:07] >> That's a great question. I you know, honestly, I think, I'm gonna I'm gonna shock a little bit. I'm say TikTok. TikTok has been incredibly helpful because it helps me get in touch with what the kids are worried about. [17:17] >> Yep. [17:18] Number four, how many hours of sleep do you get every night? [17:20] >> I'm not a huge sleep guy. My my wife keeps preaching to me about it, but I'm probably a five hour kind of sleep guy. [17:26] Fair enough. And so, well, you just said wife, married, and how many kiddos? [17:30] >> Three, but they are not kiddos. They are they're they're all grown and flown and doing great. [17:35] That's awesome. Okay, and you just said past the forties. You in your fifties, 51? [17:39] >> I am just about to turn 55. [17:42] Oh, wow. Okay, great. Last question then. Something you wish knew back when you were 20. [17:46] >> Go ahead and take the risk. You're it it's it's not a big risk and take don't see it as a mountain. See it as one step on that mountain you gotta take next. [17:55] Guys, troove.me is trying to help students find that perfect college easier, not just get in, but also get out with a great job, a great experience, etcetera. Started coding the company or building the company in 2020 right before COVID. Now to date, he's got 12 customers signed up about to get active here after Labor Day and their first cycle of recruiting. Each customer paying on average 10 to $15,000 per year. He's just trying to get early [18:18] proof points to start scaling from here. Couple 100,000 raise in a seed round from some angels as he looks to continue to grow. And what I love about this is he's eating his own dog food. He's building this because his daughter had issues with her college admissions experience. So we'll see what happens next. Dave, thanks for taking us to the top. [18:32] >> Thank you, Nathan. [18:34] 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 [18:59] 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 [19:21] 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 [19:43] 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. 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