Ueni Revenue & Funding (2024)

hello everyone my guest today is christine italian she was previously an oil trader and now a graduate of harvard college the london school of economics and harvard business school she co-founded une to help millions of small businesses compete online her international team gets sole traders and micro businesses online quickly easily and at a low cost christine you're ready to take us to the top sure all right so tell us about uni and it's pronounced it's ueni.com what's the company doing how do you make money right um well it's you and i and basically we're the click and go solution to get your small business online uh easy affordable and fast uh our entry product is free it's a freemium model um you know essentially 80 of customers go online to find local businesses but only 20 of small businesses in europe and less elsewhere have a proper online presence so you know just think about the mismatch um the vast majority of business owners do know that they need to have an online storefront but they don't know how to get started they're not sure what elements are important when building that online presence and frankly they don't want to spend a lot of time and money on the project you know there are a lot of great do-it-yourself website builders out there um but most of the the businesses that register for those sites actually don't complete the journey it's estimated it's about 10 to 20 so christine just to be clear is that really what you are a drag and drop website builder it's not drag and drop it's really a do it for me solution so what we do for them is we build them a website that is responsive and relevant to their business from a to z uh it includes professionally written text about the business features information that the customers are looking for so info about the businesses services or products yeah totally got it i think my audience will know what a website is i think that's great to understand like that's kind of what you're doing are you now are you a pure place sas business though or are you an agency well this is the thing i mean if you think about the spectrum there are the the diy website builders and there are the digital agencies and we're kind of an agency for the masses because we're building we you know we ask the business to sign up they answer a few questions and then we build them a website top to bottom we get them on google my business and then we do other things for them like push their information out to other you know high traffic trusted platform so what do you charge for this is it a monthly sas fee though or a one-time setup fee definitely a good way to describe it um we are freemium so the entry product is free and we'll build them a website and they're they're google my business for free but then beyond that they can upgrade to a paid plan that will get them things like their custom domain professional email and get them listed on you know about 20 platforms where people are searching brings them domain authority helps them rank higher in search so christine just looking at your paid cohort what are they paying on average per month for access to your tools yeah well our subscriptions are very modest um 9.99 a month to 19.99 a month right now our growth is really focused on building our free base okay and and so let me put this on a timeline when did you launch the company what year uh about four years ago okay so we'll call it 2015. at the very beginning of 2015 yet okay very good and then when you say growing your free base so so where are you at today and how did you get your first 100 free users on the platform well we definitely have had an evolution in the company so when we started we really began as a b2c search platform helping end users find the cheapest nearest best rated service and we've evolved to be as more of a the b2b solution provider now to get businesses online so that focus on on the b2b side is about a year and a half going and um and today we're signing up 200 300 businesses every day and and and so and then how many of them today how many customers are you working with well as i said we we're it's really i think more interesting to talk about the the growth because um well christine just to be clear growth going from a dollar to ten dollars is 10x right so it's actually not interesting really to talk about growth my audience really cares about how you go from kind of 0 to 10 customers and then and then kind of more factual things around channels you're using so so how did you get the first 10 customers on the b2b play when we when we got our first customers we actually started with um beyond the website doing more for them like providing adwords services some more complex you know advertising products that were at a higher price point but we saw that there was a great need for many more customers to to get the basics right first and so we we shifted our plans if you will from like the more sophisticated advertising and and you know we had a couple thousand customers on on that initial um uh set of plans to what we're offering now and we really started focusing on what we're offering now last summer okay i mean that would have been just for people because people listen to podcasts all kinds of times so that would have been 2017 summer um well in 2017 summer we were really pushing still the the bigger plan so the b2b was 2018 summer that's when you launched it sure is that is that right that's what i'm trying to understand yeah yeah i mean before it was b2b as well but as i said it was the bigger tier plans um but our current business model with the freemium package yeah began summer 2018 correct okay perfect that's super helpful to understand and then you know there's a there's a special art to getting a free to convert to a paid so what is the what is the tripwire what do you know a freezer has to do for them to increase likely they convert to paid at a high level well as i said we haven't really been focusing on converting our customer base right now from free to paid as the focus of the last six months has been growing that free base okay so you're funding this somehow then if you don't care about revenue right now so are you bootstrapped or have you raised capital we have raised capital quite a bit actually how much about 15 million pounds okay um and why do you say that's quite a lot well i think it is a significant amount of money right um i think that you know we're we're we're we're building we're building a business here but for for me at least 50 million pounds 20 million dollars is a lot of money what i'm saying is relative to what i mean the three episodes before you were 50 million raised 120 raised and 39 raised so this would seem i mean it's all relative right so so get me in your head a little bit is this kind of your first startup where you said okay i'm going to raise capital i'm going to go the freemium model we're going for a land grab and market share yep got it yeah no fair enough i mean yes and this all came in waves of course like we we bootstrapped at the beginning my co-founder and i put in our own money and then we've had um yeah three three rounds of basically angel financing i guess i see it as a lot of money because this is from our uh our personal network of angel investors and we obviously feel very responsible and take take that very seriously and now christine i can tell you're extremely intelligent based off the history of schools you've been to and graduated from so i'm assuming you really have dialed in some of the metrics around free user acquisition for you obviously then go out and convince your friends to give you this money to help scale that further how do you measure what it costs you to bring in a free user well um how you measure what it cost you i mean i think that for us it's really around how do we get to a scale that we think is relevant so our target for this year for example is to be at 150 200 000 businesses on the platform and for us we work back to a cpa that we that a we can't afford and b that makes sense in the context of you know longer term monetization now we have the plans that i mentioned but beyond that you know there are other opportunities for how we can create value for these businesses and then capture a percentage of that value some small percentage whether it's percentage transaction like a credit card model or revenue share by partnering with other businesses that also cater to this kind of small business audience and how aggressive are you being though on cpa so today to get a new free user are we talking cents or dollars it depends on the market because right now we have customers in the uk spain france india uh the u.s i mean some of these markets i should be i should be clear we opened uh india spain and the u.s just this month so um you know the growth is palpable but it's it's very fresh um so we're still discovering what those cpas are but you know it's it's budget and um and lifetime value focus but we're really you know we're focused on building a very large base of business small business users and um and two to three hundred business sign ups a day uh you know is is not trivial these aren't you know customer end customers b2c business it's it's it represents something else well so christine i want to try and understand actually i mean you have to have cohort i understand you opened three new markets recently but you have to have cohort data to then go out and prove to investors hey we can take money to spend it so you have a historical cpa i mean are we talking a dollar for a new free user or 10 cents uh you know as i say that that kind of that depends on the market pick a market and let's go deep there so that we stopped talking in vague terms sure i mean on on our specific cpas for a market you know i don't i don't know that i'm going to share our exact figures um but it's more how we think about can we can we afford to to be acquiring customers in this market given the scale that we know we need to reach so if you know you need to reach 150 200 000 customer business customers this year um you have to be pretty modest and obviously there's a portfolio of organic sources as well as as paid sources across all your channels no matter what the market is whether it's india china u.s whatever the most you'd spend for a free customer is what well look i mean you're targeting something you know three to five pounds dollars um you know but it's often going to be very much less than that yep but that's that's where you would say hey guys this test is great but our cpa is too high let's reevaluate something here and figure out how we get it down we're given tests not but you know when you're looking at over the course of a few weeks you know what is our cost of acquisition for that group of customers you have to be in that range and then you mentioned earlier you basis off ltv but it's hard to calculate an ltv that's real when there's no revenue so how do you back into an ltv you're confident with well again it's really around when you have to have some assumptions in your mind around what percentage of your ultimate base you think you can convert that's what i'm asking what is that number well you know again it's it's right now speculation because again we don't think that these plans are the only are the only future and it's really not our uh our focus right now um but you know you can look at other comparable businesses and and what they do and they're between five to ten percent so you think you feel pretty good about converting somewhere between five and ten percent of this free user base call 150 000 200 000 right in this year into paid customers at 10 bucks a month well i think that i think that one should want to try for these kinds of numbers right um they're they're reasonable it's it's sensible but i think that you have to think about the base of business customers in a more interesting way and what else can we do for these businesses so i mean let's assume all goes extremely well you land 150 000 you know free users by the end of the year by the way what are you at today would you be doubling or tripling you over here to get to 150 no i mean we're we're on the path as i said like by by the end of march we're aiming to be acquiring about 500 businesses a day i get that that's a growth rate that's a rate i'm looking like i want balance sheet flash point in time so like today right now how many freezers are on the platform we're we're coming to about the 20 000 mark okay by the way i love that it's like i can sense that you feel like that that's low but everyone starts at zero so like i love it when people are like this is where we're at now here's how we're getting to 150 here's the assumptions we're making here's how it's gonna work so 20 today again i think it's really about the fact that i think the growth rate is the most important thing because it's it's changing quite so dramatically the acceleration is there and i think it's that's much more significant than um you know where the base so far yeah but christine true i mean you know this you're an extremely intelligent person growth rate when you're small can be very misleading um and can can lead to a lot of hype where there shouldn't be but not percentages right we're talking about absolute numbers if you think about 500 small businesses that's very significant in absolute terms not not as a percentage not well it is if they can i mean it is if it is if they don't go all nine out of ten don't go out of business at the end of the year depends on what kind of small business but constant contact is a great example this gail goodman burned through 50 000 turn customers every quarter on our calls the private the public markets didn't give her a good p e ratio and she flash sold essentially to eig and she had millions of small businesses on on constant contact well yeah and you have to know your base and i think that the point is these small businesses they do have a fairly high rate of churn seven eight nine percent absolutely right um but not even per annum christine i mean constant contact was six percent monthly well i'm talking about what is the health of these of these businesses but yeah you know that's that's something for sure you have to you have to watch but when when we look at our customer base that's what we see as kind of the rate of attrition in in terms of how the health of these businesses is going okay but what does that mean in terms of your at your turn i know you have a very small paid base right now but your churn you're seeing on the paid accounts is it also reflective of that seven percent per annum well it's most of the people that are leaving are leaving either because they're yeah their business closed or in some cases they're looking for a more sophisticated solution like a more custom solution for their online presence so is that the answer to that yes then the only turn customers you're seeing are the ones that go out of business or switch and it's about seven percent annual logo churn per annum percent the percentage i i couldn't exactly share but i mean as i say the the on the freebase that is definitely the biggest reason well how does a free user churn they're not they're they're not paying so what are they turning from well exactly i mean that that's it right we're really we're talking about a free base here so so do you not have you don't have any historical evidence or anything that they're driving your assumption cells in your excel sheets of a paid user base oh i mean sure you do but um as i say they're these these are the biggest drivers these are the biggest drivers well yeah that's that's an obvious statement people stop using my product because they go out of business yeah that makes total sense but when you start to actually understand can you monetize these users i mean why are you not measuring revenue churn across the base the paid base well look for the small businesses this this is one of the biggest drivers right and that's not true for a lot of for a lot of products right they don't have so many businesses going uh out of business so for for us it's actually a structural consideration you have to you have to take into account no i agree with you there that's part of what i'm saying is is constant contact at their paid user base ignore free you have to get like a whole other level before so you're like a free let's just talk paid at constant context level they could not get churn below like six percent per month because of exactly what you're saying people go out of business so that's what i'm trying to say is if you have figured out a way to get your churn to seven percent annually which is like point four percent monthly that's incred that's incredible in this cohort no but again to kind of set the expectations and and be be accurate we're really focused on the i'm growing the freebase today so i i don't have good data to share with you to answer your question how do you know when a free user cancels well sometimes they ask us they say like look i don't need this anymore i'm i'm unfortunately going out of business or you know i hope to pick up the business later this kind of thing and sometimes they ask can you know can you take it down or they just let us know um so people are are mindful that once they've set something up that they you know they're they're not because we are focused on engaged users and that's something that you know define engage though they visit the site once they log into the admin section at least once a day like what's engaged mean well it's in the in the course in the course of a month um have they taken have they taken any action and we uh we see that you know business owner interactions with their website over the last 30 days you know we see on average them taking several actions so that's something we monitor as part of the health of the um of a customer also what kind of page views are they getting um on a monthly basis how many business inquiries like how many customer inquiries i should say uh the business is getting in a given month because you know those calls booking requests that translates into real revenues for the for the business so all of those are kind of customer health metrics that we look at and yeah it's it's a free base but it's uh it has to be an engage base talk to me a little bit more about your team today how many folks we're about 45 people um and based in the uk czech republic and ukraine um very international team i've kind of lost count of the the number of nationalities but uh english is a second language for pretty much everybody that's cool okay so uk remote locations uh now you raised 18 million so obviously you're burning to try and drive towards that free kind of user-based target of 150 000 by the end of 2019. let's just make let's assume everything pans out like like you said it would so let's say you hit 150 000 at the end of the year and let's say you do convert five percent of those to ten bucks a month i mean that obviously would put your your paid monthly revenue like 75 grand a month so still less than a million bucks there an mr and ar even if everything turns out on 18 million raised i mean how do you grow into the last evaluation you raised at but i think that's the whole point that's why i think it's um i know it's a standard kind of metric to talk about but i don't think that it's really the focus um necessarily for us because i think that there are other monetization streams here these businesses are relying on us as their kind of uh storefront so will we run transactions through the platform um will we through partnerships do other kinds of uh relationships with other businesses and then do a revenue share by offering other products and services to our base those those are other potential areas to explore so um but if you think about it how many businesses out there really do have so many uh such a large engaged base of small business customers i mean it's a highly fragmented market um quite difficult to uh attract and retain these these businesses and uh engage them with the products so um we see value far beyond that's why i think sure it's a it's it's something you know it's a calculation to do to say five ten percent but i think those are kind of um just arbitrary numbers yeah but christine you have to understand my audience is listening to this going of course she can say that they've raised 18 million bucks of course she doesn't have to think about revenue she doesn't have to she got a big check somehow so that's why i'm pushing here right so let me ask a different question you are extremely articulate and you did something really smart early on which allowed you to raise so much money without a ton of dilution what was that how are we able to raise so much and not give up a huge chunk of the company well look i think that it's it's really about i think a fundamentally different model um this isn't another drag and drop website builder it is about this building something for the business at a very low cost that allows us to um to create a differentiated offering in the market and um and the ability to get quite so many businesses to be signing up on a daily basis i think shows that so you know this this do it for me solution i think is is really the key to that uh who who else do you see kind of out there um providing a fully built kind of you know with professional text uh optimized site for for small businesses ready to go because you know yeah for free for free by the way i by the way no one and i think there's a reason for that i don't think it works i don't think i think unless you have big rich people behind you writing you massive checks i actually don't think it works okay but i think the reality is that a lot of these businesses have been completely out of the market in terms of digital i think that they haven't been reached either by the by any big businesses that have tried to reach out to them because they are quite so fragmented and but these things are free though right i mean christine you have to be like 10 times better than somebody so i mean wix weebly squarespace i mean they all google sites they all have free i mean they all have free tiers right absolutely but the question is how come these sites have not penetrated this you know these i think they have no they have of course but there are playing in the uk there are millions of business of micro businesses small businesses that are still not online 50 000 new businesses being added every month and most of these businesses report to us they say why why have they not gotten online before they are afraid it's going to cost too much and even when it's free they don't have the time or they think that they you know need technical skills and even with a do-it-yourself website builder they're not sure what exactly they need to do what content do i need to put on my site what layout do i need um as a plumber do i know what text i need to write so that it's attractive to my user to my customer base and it's going to be optimized for search that's that expectation that they're going to know that and be able to do that themselves it that's difficult right and so i think i look listen i agree with you i agree with you i agree with you on that point um i think let me ask this last question before we wrap up um you're fit you're in the in the mode right now of kind of figuring things out and you have some core assumptions you're testing um your ability to kind of see what the opportunities are after you build this massive base will be dependent on how much time you've bought yourself so as a ceo leading this company how much time have you bought yourself bought yourself when you consider your team of 45 whatever your current burn is and the money you've raised sure i mean the thing is we're we're not cavalier about these things and so um you know we have probably about a year and a half two years um to to give us you know ample time to really make uh you know those targets that we're talking about and uh i think a dent in the small business market to try to get these you know businesses engaged and bottom line is this that you know when we deliver them a good free product they that then they begin to use we put them on a cycle of you know then being able to talk to them about other services and part of that is you know growing their online presence with the packages that we have and in earnest we're going to going to be working on some of those upsells you know in the middle part of this year so nathan i'll report back to you i promise on on some of these you know how that's going and you know are we above this 10 um but you know that's that's the point that for a lot of these businesses we're getting them on the journey for the first time and some of them are very skeptical and some of them have been burned in the past and that's why um it it's important to start building that trust with with a free product yep i hear you very good let's wrap up with the famous five number one what's your favorite business book probably moneyball i love uh michael lewis number two is there a ceo you're following or studying um i guess i'm always watching jeff bezos he's the master of the uh the small business uh fragmented market so number three what's your favorite online tool christine for building the business uh probably deeple the deep uh deep learning language tool it's a machine learning uh translator tool number four how many hours i sleep to get every night i i'm a big believer in sleep uh seven and a half hours usually but um i'm eight months pregnant so that's about uh four hours now congrats okay so so married and how many kids oh this is the first oh first kiddo very cool do you mind me asking how old you are i'm 36 very good okay last question what do you wish your 20 year old self knew yeah be even more bold than um you're inclined to be guys be bolder coming from christine again launched uni dot com ueni.com hoping to get to 150 000 small businesses that she has launched free websites for with all the google juice behind her seo the google places all that jazz uh has 18 million bucks to do it obviously burning capital today a team of 45 folks in the uk and other remote locations again trying to crack the smb space keep churn low but still deliver value at the same time christine thanks so much for taking us to the top