How Trufan CEO aanikh kler grew to $2M revenue and 75 customers in 2023.

hey folks my guest today is annette clary he's 23 years old and the co-founder of trufan a company building products to improve brand engagement while compensating users for their data he's passionate about gaming and esports and is also an investor in the fuzzy clan anik are you ready to take us to the top hi i'm nathan how you doing what is what is that the fawzi clan am i even saying it correctly uh it's faze clan so um obviously they're an esports organization they uh been probably around for well i'm 23 and i've been watching them since i was like probably 11 12 years old so probably like 10 11 years um and yeah actually they recently just announced they're going to be going public soon which is super exciting the first uh in my opinion like major esports organization to go public so yeah i'm super excited and again like i grew up being a master of call of duty nerds so to be able to kind of join them as an investor almost two years ago now was really awesome all right tell me about true fan what's the company do and who are you selling to yeah absolutely so true fun as a basis is talk about the bio like really what we aim to do is help enterprises collect compliant consumer data in a way that you know really cuts the the consumer into the data equation so we work with large enterprises like netflix or the nba to essentially allow them to better understand their audience through data so the main areas we focus on are web data first party data like emails uh phone numbers mailing addresses and social media data like a user's data on instagram or twitter and what do these these customers on average pay you prompts to use the technology yeah so you know we definitely range like we have um you know uh subscription plans that you know a small business or many influencers use on our website that range from like you know 200 bucks a month to 500 bucks a month and you know enterprises we definitely have some large you know larger enterprises that you know are probably our acv is anywhere from 2500 to about 5 000 per month on average for an enterprise customer so your largest is what 60 grand a year uh no we have a we have a few customers who are kind of outliers that are more along the lines of like 140 to 160. oh wow interesting okay so so really truly full span here but sweet spots maybe like a grand a month something like that um i'd say we heavily weight towards the enterprise side so probably i think our actual acv number between uh enterprise and transactional is around 1900 um okay okay interesting fair enough and then what's the back story here when did you write the first line of code for the platform yeah so true fan was you know really started about three and a half years ago and it was really the the brainchild of kind of my co-founder swish um you know he is an amazing amazing guy really awesome background but he was in new york and he'd been building media companies so his uh his project he was working on before trooping was this media company called dunk and they essentially own instagram accounts twitter accounts snapchat accounts all regarding basketball content and they had about 11 million followers across the network so wait hold on there's this is too much coincidence here basketball his name is swish his name actually swish uh so his name is swaroshish but his pe teacher in sixth grade couldn't pronounce that and nicknamed him swish i got it okay this makes it so this was this was the the nickname was long before he got into any of us that's hysterical okay so you guys start writing code in like 2018 um how many customers are now serving today yeah so right now i think we have about 75 enterprise customers and in total probably over oh man i'm probably going to get this wrong i think like 300 to 400 customers i'm probably i'm honestly probably getting the exact customer amount wrong but i do know about 75 enterprise customers so if we just look at these enterprises at like two grand a month on average i mean what you guys are north of 150 grand a month right now in revenue correct yeah okay very cool and maybe double or triple that right if you add in all the smaller users right yeah yeah our our our arr is you know probably you know in terms of where we're at you know it's definitely north of like 1.5 1.6 so if you're feeling uh feeling pretty good yep yeah yes yeah so i mean 1.6 would be okay well hold on so like 150 grand a month would be almost a 2 million run rate but you're you said you're closer to 1.5 million rate correct yeah okay okay fair enough cool so so talk to me a little bit about this other thing you're working with just surf how did this sort of come out a true fan are they related yeah absolutely um i think you know really to be to be honest with you nathan a lot of what we've done over the last couple years is really just try to understand where consumer data is going i think you know if you say like what am i obsessed with right now i really you know outside of like you know probably like skiing or diving which are like passions or hobbies um i'm really obsessed with consumer data and like what does the future of consumer data look like and the last couple of years whether we were building trufan we were really just trying to understand like what does that look like and what we realized is we believe that the future of consumer data is opt-in and it's a value exchange meaning that if a consumer is going to give data to a brand they need to get something in return long gone are the days where you know your privacy and your data was the admissions price for entering the internet we don't believe that that's what the future of the internet is going to look like and thus you know all of the last couple of years and working with these different customers we started to understand that we started to understand that you know brands wanted better data on their audience but they also wanted data that they could use you know moving forward and you know that they would actually be able to use with gdpr ccp anyways long story short surf was our way of saying we want to reward consumers for their data and we want to provide brands compliant data that they can't get from other sources so what surf is it's a browser extension that anyone in north american can download and you get points for browsing the internet and you can use those points for items gift cards whatever you want then all the browsing information you share is anonymized so what that means is that by actually being on the internet you can earn from sharing your data and your data you know instead of just being taken from other large companies you can learn from it so so help me understand like can you quantify like what do you measure gmv through surf or like what's the key metric there yeah for us in terms of you know key metrics with surf right now are really just daily active users um you know launched about a month and a half ago and we're at about 16 000 daus which is really really exciting for us over 35 million urls shared so you know then you know really great feedback like close closing in on i think 300 reviews on the chrome store which is really exciting as well compared to other you know browser extensions that have been out a lot longer than us uh we've had really positive community feedback and people being excited about this idea that they can earn from their data mm-hmm and uh you launched on product hunt as well how many sign-ups did product hunt drive yeah i think product con was our first like our first real day you know where we weren't just you know giving it to friends and family i think we got like 600 something uploads from product hunt i think you know at the end of that day we were at like maybe four or 500 users so i think product time was definitely a massive driver of that at least you know three 400 users most likely at least saw us from product content yep and how do you make so what's the plan i mean how do you make money on surf yeah absolutely so i think the best thing to understand about surf is we're really aiming to disrupt kind of you know web analytics so if you think of companies like comscore you think of companies like similar web or nielsen um you know these are the companies that we're looking to disrupt and again like neil's uh similar web went public they do about 250 million in annual revenue so for us our goal is just to continue to acquire users continue to reward them for their data and then essentially you know monetize that data to brands through insights how many rewards have you sent out so far yeah i think we are at about 40 000 that we've given back to our users in terms of point redemption so users were deeming points for rewards and we actually uh well yesterday was the last day but any user downloaded surf was entered to win a tesla so we're actually going to be giving away a model three probably we'll be announcing the winner in the next couple days because the contest or the the giveaway just closed yesterday evening so the big game with gift cards like when target does black friday gift cards is you're betting effectively that people forget they're on their walls and they actually use the gift card so you never actually have to like provide that thing so when you say 49 points given back to your community how much of those have actually been redeemed for real things so on our side we don't necessarily like we pay for the gift card in advance it's not necessarily like when it's redeemed we give them the value right up front so on the you know the brand is essentially making money from us when a user redeems the cart so for example let's say starbucks very popular gift card we pay starbucks 10 bucks to be able to give the user the ten dollar starbucks gift card so that's what i'm asking that's what i'm asking it's like let's say i'm a user and i have 10 000 points and it's gonna cost a thousand points to get a 10 gift card from starbucks via surf but i never remember to go in and tell you that i want that gift card using my surf points right how many like unused surf or on like i don't know unused surf points exist right now sorry no that's the the 40 000 has been redeemed points in terms of overall points there's probably another 120 130 000 worth of points that have been unredeemed so far many users prefer to save their points and get bigger items um not everyone necessarily wants to redeem for a 10 amazon starbucks card right away some people are more into you know passively accruing points over time and getting a bigger item later but the forty thousand to fifty thousand dollar metric that i gave you that's redeemed rewards that's not overall compensation overall compensation is closer to about probably a hundred and ten hundred and twenty thousand dollars and so where do you guys get the money to buy a tesla or pay for forty thousand bucks worth of starbucks gift cards yeah so we again it's like we were venture capital funded we have some really amazing investors and funds that have come on and supported this vision ultimately for true fan so surf is a product of true fact i see so how much have you raised not a separate company not a separate yeah not a separate entity under all under truth so how much have you raised it true fam yeah we've raised just under six million so far and when was when was the last round uh well we actually just announced a two million dollar extension to our seed round we did earlier this year that was probably late last week um last week we announced that uh seed extension my team recruiting great founders come on the show is quick this is wonderful okay so so when was the first round done uh our first round was done probably like almost two years ago but that was small right we're talking you know three hundred thousand four hundred thousand our last major round was the first part of the seed and that was probably middle of q2 of this year and that was uh about 2.5 million canadian interesting okay so the 300 000 seed you guys raised back in 2019 um usually founders are selling like 10 to 20 percent of the business and the pre-seed round is that sort of where you guys came in at um i'd probably say a little less like what we worked off of was essentially like we did the whole yc safe model so we kind of followed suit in terms of traditional we were really lucky like oh swish and i have a lot of mentors and kind of advisors that have kind of been through the startup uh startup world a lot and they kind of helped us navigating those early early ages but we kind of pegged closer to around what most kind of yc companies signed their um on their deal with yc which is around i think i can't remember if it's changed but when we were looking at it it was like six to seven million um on that was the cap of the safe got it got it so you raised three hundred thousand bucks on a safe with a cap of seven million something like that yeah roughly around there yep i see i see okay now when you do this c did you guys decide to price it or stay on on a note so the seed was priced correct yeah yeah yeah so walking through how you came to that because that's a big negotiation right how do you do evaluation there most are selling again 10 to 20 of the business in the seed round yeah absolutely i think for us it was just you know looking at what revenue was that you know growth potential um you know we had signed some like this year for us was a really big year in terms of proving out we can sign customers north of 100 000 a year we've been able to do that with two or three different customers so that was like a big proving ground for us is like can we increase acv because the beginning of the year acv was only about 800 now it's about 1800 so um that was a big uh proving ground for us so really it was just kind of sitting down and saying hey you know what do we think is a fair multiple that we're seeing you know we have friends that have raised on 40 x multiples we have friends that have raised on five x multiples so we you know we sat down with our lead investor they kind of pegged what they thought was fair you know we we agreed and kind of moved from from that from that space and so what i mean the extent you can i want to see the exact valuation but what sort of range multiple did you decide to raise that yeah probably you know around i'd say like 15 i'd say roughly around that area yeah okay fair and um and again you're 1.5 million sort of run right now so ryan we're talking like like 25 million sort of you know to 30 million sort of evaluations somewhere in there yeah somewhere around that yeah why do you need them i mean why does this why do you need so much capital i mean obviously you get deluded every time you do this why do you need money here yeah i think for for us the main thing was you know and it's a great question i think because actually for about a year of the business we were cash flow positive and that was actually when we were sorting out you know what did we want to do we had some really great customers you know growth was good it wasn't crazy fast you know vc scale but it was good because we were just focusing on staying profitable um you know what we decided is that you know both my co-founder and i realized that and again this kind of goes into the longer story of why we even came to surf was we started to figure out solely but surely different things related to consumer data and we wanted to kind of push our hypotheses and see if they would end up being true and for us to be able to do that at the scale that we wanted to we we thought it would be best to bring in venture capital so that's kind of what our decision was again like i said there was a close to a one-year period where we were uh we were you know cash flow positive and we had no intention of fundraising but as we came along and different customers wanted more and more we realized that we were kind of at a crossroads and both my co-founder and i are young and thought it'd be you know we might as well see what we can do we do love profits and help me understand growth if you're doing 125 000 a month today in revenue where were you a year ago do you remember yeah a year ago today was probably about 60 65 and like doubled you've doubled your every year something like that yeah yep very cool um and then look i mean these 75 customers that are paying you these enterprises so like what would nike pay you for what what are they getting yeah so i think it really depends um you know let's uh let's take an example which is ea so ea is one of our biggest customers uh we work with them for their annual ea play live stream which is their biggest event you know like 80 000 concurrent viewers so what with ea it's pretty you know they they have everything so i think that's why i want to use them as an example so they analyze all their social data so all of their ea social accounts on instagram and twitter they're able to do analysis on it so who their followers are who their most valuable followers are the location the what's in their bio what they talk about etc so and that's not just eea but it could be you know fifa or other properties that they own within kind of their social lens the second thing is all kind of the the first party data so whenever ea does their live stream or their fifa launch they like to run a lot of giveaways so what that means is they want to essentially give away different prizes or game codes in exchange for users to do certain actions i might be following them on a social uh social channel signing up for their email newsletter downloading their new ea play app whatever it may be so our software helps facilitate that entire interaction ea can pick what they want to drive people towards and we do the rest to make sure that that's verified and they collect all the first party data and then they can view all that data in a dashboard and for example if they want to activate all the emails of the people who entered who happened to be from los angeles because they're doing a big you know nba promotion there then they can do that through the dashboard and talking about the team today how many folks full-time yeah i think we're about 28 people full-time right now 28 yeah and how many years uh let's see i think it's 11 11. okay very cool and do you have sales reps at least at these like acv levels i imagine you probably do right yeah we do so we we actually uh we hired our first real sales person at the beginning of this year uh which was great and then we brought on um another two people now to the team so it's the sales team's about three but my my co-founder switch does spend a lot of time kind of you know selling as a ceo as well very cool listen this is great now are you planning on raising any more anytime soon well i mean because you just raised the 2 million right so you're going to invest that for a little bit what do you think you can get revenue to before your next raise yeah i think our our goal is to probably get revenue close to about 2 million um you know within the next probably six to you know six months i'd say um and again for us like a big focus is surf user growth to be honest a lot of the funds that we've talked to recently you know that we like to keep warm are they're very interested in surf just because from a pure consumer metrics play we're kind of doing great in terms of like you know compared to other consumer companies out there so they're interested in kind of what is the uh you know intertwining look like between this you know consumer app and the data we're generating there and the businesses we have paying for our current b2b product like can we bring those two things together makes a lot of sense in the meantime let's wrap up here with the famous five number one favorite business book um the hard thing about hard things by ben horowitz number two is there a ceo you're following or studying um i really like not i don't think not like currently that i'm obsessed with but actually that's a lie um one of my favorite ceo is the ceo of dapper labs raham gorgozu dapper labs number three what's your favorite online tool for building a business um i honestly really really like slack mainly because of all of the integrations that we have so uh all of our team can be updated with metrics revenue you know user feedback zendesk everything all lives in our slack and i think it's a really good hub for any everyone on the team to get an overall insight of the health of the company number four how many hours i sleep to get every night uh i get probably seven to eight hours of sleep that's very big situation married single kids uh i am in a long-term relationship with my girlfriend again i'm 23 years old uh she's 23 so we're both young we've been going out for four and a half years she's finishing her final year of med school so probably uh move along from just being boyfriend girlfriend in the next year or two last question what do you wish you knew three years ago when you were 20 uh i think three years ago i i wish i knew that it's okay to learn i think so much of being a young person in startups like i went to stanford like a lot of it is just pushing to achieve and not necessarily taking the time to actually learn that it's okay to learn and fail and i think 20 year old me could probably could probably hear that and it would go a long way guys true fan is helping big brands like ea sports collect audience insights their new tool called surf is basically rewarding folks for using them paying them for their data to continue powering this machine and get network effects they're doing sixty thousand dollars a month a year ago now 125 000 a month so really healthy growth they just close the second part of their seed round so 4.5 million total raised in their seed round at somewhere between called a 20 and 30 million valuation they're scaling fast 28 on the team 11 engineers as they look to continue bringing on sales people and pushing product forward specifically surf thank you for taking us to the top thanks nathan thank you so much for your time 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 it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas 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