Tuto Revenue, Valuation & Funding (2024)

hey folks my guest today is ohada ronan he's the co-founder and ceo of tutor he's 30 years old and also father of two little ones he was member of techstar's 21 cohort and studied computer science and entrepreneurship at rickman university after building several businesses he's now working on building the next knowledge engine for the internet ohio you ready to take us to the top thank you hey how are you i am well so i think the comp for this p when people hear you know knowledge engine for the internet they think google search engine they might think like algolia or something like that what are you building yeah so basically um what two to building is is an engine that helps us software's any uh web application uh to be able to teach their user train them educate them on how to uh properly use the software and to grow with the software together um so we understand that the most important thing when we talk about education and learning is to understand what the user doesn't know and try to understand it and provide him with the relevant content and the relevant education he need in order to overcome his needs so this is what we draw more soft is it more software oriented though or more like knowledge based so is it more like pendo and gainsight and jar and these sorts of things or something more like a knowledge base so so yeah um in in some way with combination of pendo and loom we been able to understand diffuser doing something uh while using or or using a visual content video we we see that a lot of companies invest a lot of money and efforts in creating what's called digital adoption platforms like walk me pando upkeeps and others but they also invest a lot of money and effort in creating content like visual content tutorials is going to youtube and and they create the academy that is a separate um product from the product itself and the idea is why not combine these two wall together on top of the product itself on top of the product ui and to give you in proactive way what you need to understand as the next step in your journey basically this this makes sense to me tell me what customers are paying on average per month to use the technology so basically how much they pay um is is very diff depend on the the usage and and how how much customer they have uh but we pricing it right now uh at 79 dollars per seat per per month uh it's so it's very very depends from company to company what would you that's why again we could talk about every customer's individual thing we don't have time so if we look at what the average is what would you say the average company is paying you per month two seats so yeah so average company it's it's something around 250 um dollars per month got it so caught me like four seats five seats something like that yeah something of that because our tools basically help a lot of different departments in the company uh we focus on support customer success uh product teams and also sales so it can it can really drive the revenue for the company um so a lot of people using it and ohio when did you guys write the first line of code for the for the company the first time we wrote the code for the company yeah when did you start building the business the first line of code when did you start building it um it was like back then we started to think about that the idea and um we got the opportunity to to try to get into tech stars at the beginning we thought it's it's a long shot and it's maybe not in our focus but when we start to thinking about that and sending the application uh we try to create a demo for the mvp something that we can show so we wrote the first code that was some of the first initial idea of of the company and it was like in in early april 2021 so our company is less than one year old oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview got it i love that and when you say we uh tell me about your team is it two of you guys how many co-founders there are three co-founders all of us uh study together computer science and entrepreneurship uh at the reichmann university's private university here in israel uh we had previous startup that tried to solve the return goods in e-commerce in the consumer side um but with that how'd that turn out should i shut that one down yeah after one year and a half from shut it down and we back to ideation um and we came up with uh with tuto um yeah and are you guys all you just did the easy thing and said okay we'll be even everyone gets 33 or how did you split equity we we totally even we really believe in that we're trying to take decision as a company um we really understand what the everybody like strange and where is the weakness weak weaknesses and trying to to move forward like a team like a company and not just in individuals and have you guys bootstrapped it or did you decide to use raise capital no it was very far very fast we got the 120k from techstars um i forget what do they do yeah they have like a combination of like taking um give you a safe uh for the 100 and and guarantee for the 20 um for the 20k um but what's the gap i forget what what's the cap on the safe usually the cup of textures is three uh three million uh pre-money yep so you raised 100 grand on a 3 million note with another 20k yeah yeah exactly um okay and we get into texas like just with a deck who doesn't have anything and get in with companies that you know live for one year two years and it was very weird for us so we this is what starts the journey for raising capital for us you know uh so boot trap no was one of the the option of after we raised the first money so have you raised additional capital or just 100 grand oh have you raised more money no after after yeah after a few like three months that we've been in in texas it was very hard for us like roll across there because we were very young with not validation then we focus on creating products that we can test we do a product on and then um we raise more money we wanted to raise 500k in the end we raised more than 700 dollars from a lot of angels and and legit investors we had we have in the cup table um justin martin is is one of the founders of tinder that invest in pitcher steal money and we also have arunaris that is was uh um partner in y combinator and a lot of like great people in the cup table that help us to grow and i'm very happy for for this round and very very excited so you would call that sort of your 700 000 seed round correct press it well okay so what is so there's the tech stars round which is what what's that like the pre-pre-seed round or what yeah yeah everything they they get it's the same round um and and from here we like working to get some traction and get some numbers and we will start doing soon the seed round so the 700 000 bucks you raised on top of the 100k from techstars was all at that 3 million cap yeah i see i see okay so and that's that was pre money or po well i guess it's a cap so it's sort of pre so you sold basically 25 of the business free yeah yeah okay interesting tell me more about customers right so you have a theory in terms of who's going to use this and how they're going to use it how many customers are you working with now today so right now we have five customers that we're working in in design partnership we have signed up to the company for for the product almost 70 other companies that we have like the difference between our self-serve product and the cell oriented customer that we are looking after so it's it's different approaches for these companies and these companies um and yeah so we most focused on on the company that we are working to forecast build with them to flows and give them insights that we can't right now give to the other 70 that registered to the company um in terms of persona most of them are abc round companies that mostly do sas ai some analytics tools cloud computing in these areas of companies that creating something that is complex but for like non-technical people uh this is our go-to when we talk about customers so you have 70 on the wait list five are on a paid plan of some sort of about 250 bucks a month so you're doing about 1 250 bucks a month right now on revenue something like that yeah and tell me more about the product launch you did this back in october of 2021 you got about 442 upvotes what was the outcome of that did you see a bunch of signups if so how many it's interesting um it was like our like fish lunch um we learned a lot of that from from the people from from sign ups from like the first week was like i don't know 20 30 20 companies um but the the the waves that product hunt gave us it was much more than that uh we tried to get pr uh people wrote about us in different places uh we featured on magazine in french that until now give us like traction to the company and get a lot of french companies registered to tutor um so i highly recommend to anybody that have product that he can launch in product time to do that um you give a lot and and you can talk with your customers and we are really believing in you know customer first we are customer facing and it's it's very helpful for any product manager or uh founder to talk with the the customers and what they want what they need and what the problem with the current product and tell me more about the team today how many folks are full-time so right now we're uh six full-time and we grow to seven um so yeah it's very exciting we moved to new offices and there is a lot of new energy in the team um very very exciting times how many engineers uh the company is basically split for 50 50 so it will be four people on the engineering team and three people on like the business side yep sales marketing all that stuff what do you believe yeah how are you gonna go from five customers to 500 customers what's like the growth channel you're most excited about testing um so right now the company we have like a grow engine that's focusing on account based marketing and sending like cold emails and we have like 30 percent uh reply rate and we have more than 90 open rates these amazing numbers um and the goal is to hit like 30 companies that we are working in design partnership to get some insight about the analytics capabilities of the tool and and from there after we we do our next round basically we will put the the the infrastructure to do scale because some of the the processes today is not scalable because we need to build the data sets and then we will be able to grow and the way we will do it is basically i want you to do more product-led growth um strategy or mindset on the product as a self-serve product and everybody can install two to on their software and start get insights and the engine will be automatically uh suggest to the users the next step in the knowledge that they need to understand in the product in order to get more volume i guess so sorry let's go back to what's working so far which are outbound emails you said you have an 80 to 90 open rate what subject line are you using in those emails so it's it depends we have like different sequences uh it's it's all the sequences is linkedin and email combined so we start all the process from like sending and connection requests with no like any like i don't know any ask so it's not it's just that the connection hey i'm really impressed with what you are doing and and [Music] i get linkedin requests all the time from people saying nathan i'm really impressed with what you're doing your job title looks really important we should connect i ignore all of them if you have 80 90 success rate you're doing something very specific in your connection requests what text are you using um i can say that we try to be much as much conversational like like how i talk with you can you read me an example yeah sure let's let's do it like i open like one of the sequences um and let's see so we started with uh you know your profile caught my attention i was very impressed with the experience uh i give a line of what we are doing tutor is creating a tool for and it's dedicated for the the different role that we're targeting i love to connect with you fast with no like we do like this in the no and then basically the email the subject line is the first name and my name uh as a connection between them um and then you know it's couple sentences like your role has caught my attention as a product leader myself um i wonder how like a few questions and like is that or that interesting you um and you send that via email yeah and we try to create this conversation conversation and it's it's it's so then what you go from linkedin connecting request to their email and then what are you trying to do from the email get on a zoom call or what's the call to action yeah so basically what we're doing now we add like abm campaign on linkedin so all the people that get the email also will see us on the social platforms um and and then we basically booked a meeting so we talk a little bit on the email and and i say hey i will be happy to get your opinion on what we're doing and also maybe there is a potential to work with you um and from there we do conversation like that i show them the product i understand uh um their needs try to tell them how to talk and revolutize and change the way that they use today like their processes with talking and connecting with their with their users um and then we go from there sign up the documents and everything that uh that's important to start a design partnership and go for them and is the design partnership paid yeah of course we really believe in paying how much i think that as as the number that we took earlier is the same it's the same money it's the 250 um uh box um 79 per month per seat uh this is what we're talking with everybody i really believe that even design partnership needs to be paid uh because you want to see that and second basically it's make them more committed to the process i think understood so you're calling it you're calling it a design consultation or whatever but really it's they're signing up for your sas product you're putting a lot of touch on them to make sure it works as you go from five customers to 10 and you'll sort of scale from there yeah all right um i tell you what is the partnership inside that um we want to get from their side uh metrics and we want from their side to create an a b testing um in in their platform and this is the partnership more more like you know hot relationship close relationship um make better connection with them talk with them regular basis weekly basis to get more understanding and how they uh experience our product this is what the most important thing in the partnership understood you're optimizing for learning we're out of time though let's wrap up here with the famous five number one one word answers if you can number one favorite business book um in my top of my mind shooter shoe dog number two is there a ceo you're following or studying um i really like zeb bevens uh the ceo of click up i think you do like amazing job number three what's your favorite online tool for building a tutor best online tool um i i can say not for tutor but me personal i really like akiflo uh it's it's really making a difference number four how many hours of sleep to get every night ah there's two kids that are very young five six okay and how old are you thirty thirty okay so married with two kids thirty years old last question something you wishing you when you were twenty that i can start earlier and the life is can educate you much more than any other thing in your life guys three friends who went to school together launched a brand to help with e-commerce returns it failed they learned a lot they launched instead in 2021 a company called tuto which is effectively help they think of it like loom plus pendo put together they've got nine six people on the team today they've raised 820 000 in total capital on a traditional save 3 million cap five customers out of 70 who are sort of on the waitlist are already paying 250 bucks a month so 12 uh 1250 per month right now on revenue as they look to keep scaling just getting started but exciting vision we'll see what happens next oh thanks for taking us to the top thank you nathan thank you very much one more thing before you go we have a brand new show every thursday at 1 pm 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