How UENI Is Building a Free Website Platform for Small Businesses With £15M Raised (Interview with Co-Founder Christine Telyan)

Introduction and Background

Nathan Latka

00:01Hello, everyone. My guest today is Christine Telyan. She was previously an oil trader and now a graduate of Harvard College, the London School of Economics and Harvard Business School. She cofounded ueni 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 ready to take us to the top?

Christine Telyan

00:21Sure.

What UENI Does and How It Makes Money

Nathan Latka

00:22Alright. So tell us about ueni. And it's pronounced...

Christine Telyan

00:25It's it's ueni.com.

Nathan Latka

00:26What's the company doing? How do you make money?

Christine Telyan

00:28Right. Well, it's ueni. And basically, we're the click and go solution to get your small business online easy, affordable, and fast. Our entry product is free. It's a freemium model. 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 just think about the mismatch. The vast majority of business owners do know that they need to have an online storefront, but

01:00they 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. There are a lot of great do it yourself website builders out there. But most of the businesses that register for those sites actually don't complete the journey. It's estimated it's about 10% to 20%.

Do-It-For-Me vs. DIY Website Builders

Nathan Latka

01:23So Christine, just to be clear, is that really what you are, a drag and drop website builder?

Christine Telyan

01:27It'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. It includes professionally written text, about the business, features information that the customers are looking for. So info about the business' s services or products.

Nathan Latka

01:49Yeah. Totally got it. I I think my audience will know what a website is. I think that's great to understand, like, that's kinda what you're doing. Are you... Now are you a pure play SaaS business, though, or are you an agency?

Christine Telyan

01:58Well, 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 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

02:18to other high traffic trusted platforms.

Pricing and Freemium Model

Nathan Latka

02:22So what do you charge for this? Is it a monthly SaaS fee though or a one time setup fee?

Christine Telyan

02:26Definitely a good way to describe it. We are freemium, so the entry product is free and we'll build them a website and their 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.

Nathan Latka

02:51So Christine, just looking at your paid cohort, what are they paying on average per month for access to your tools?

Christine Telyan

02:56Yeah, well, subscriptions are very modest, 9.99 a month to 19.99 a month. Right now our growth is really focused on building our free base.

Company Timeline and Early Customer Acquisition

Nathan Latka

03:07Okay. And so let me put this on a timeline. When did you launch the company? What year?

Christine Telyan

03:12About four years ago.

Nathan Latka

03:13Okay. So we'll call it 2015?

Christine Telyan

03:15At the very beginning of 2015, yeah.

Nathan Latka

03:17Okay. Very good. And then when you say growing your free base, where are you at today and how did you get your first 100 free users on the platform?

Christine Telyan

03:25Well, 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 what we've evolved to be is more of the B2B solution provider now to get businesses online. So that focus on the B2B side is about a year and a half going. And today we're signing up 200, 300 businesses every day.

Nathan Latka

03:56And then how many of them today, how many customers are you working with?

Christine Telyan

04:02Well, as I said, we were... It's really, I think, more interesting to talk about the the growth because...

Nathan Latka

04:08Well, Christine, just to be clear, growth going from a dollar to $10 is 10 x. Right? So it's actually not interesting really to talk about growth. My audience really cares about how you go from kind of zero to 10 customers and then more factual things around channels you're using. So how did you get the first 10 customers on the B2B play?

Christine Telyan

04:25When we got our first customers, we actually started with beyond the website, doing more for them, like providing AdWords services, some more complex advertising products that were at a higher price point. But we saw that there was a great need from many more customers to get the basics right first. And so we shifted our plans, if you will, from the more sophisticated advertising. And we had a couple thousand customers on that initial

04:59set of plans to what we're offering now. And we really started focusing on what we're offering now last summer.

Nathan Latka

05:05Okay. So that would've been just for people, because people listen to podcasts all kinds of times. That would've been twenty seventeen summer?

Christine Telyan

05:13Well, in twenty seventeen summer, we were really pushing still the bigger plan.

Nathan Latka

05:17So the B2B was twenty eighteen summer. That's when you launched it.

Christine Telyan

05:21Sure.

Nathan Latka

05:22Is right? That's what I'm trying to understand. Yeah,

Christine Telyan

05:24yeah. I mean, before it was B2B as well, but as I said, it was the bigger tier plans, But our current business model with the freemium package, yeah, began summer twenty eighteen, correct.

Nathan Latka

05:33Okay, perfect. That's super helpful to understand. And then, you know, there's a special art to getting a free to convert to a paid. So what the tripwire? What do you know a free user has to do for them to increase likely they they convert to paid at a high level?

Christine Telyan

05:46Well, as I said, we haven't really been focusing on converting our customer base right now from free to paid as a focus over the last six months has been growing that free base.

Fundraising and Angel Rounds

Nathan Latka

05:55Okay. So you're funding this somehow then if you don't care about revenue right now. So are you bootstrapped or have raised capital?

Christine Telyan

06:01I've raised capital quite a bit, actually.

Nathan Latka

06:04How much?

Christine Telyan

06:05About £15,000,000.

Nathan Latka

06:06Okay. And why do you say that's quite a lot?

Christine Telyan

06:10Well, I think it is a significant amount of money, right? I think that we're

06:19building a business here, but for me at least, is 20 a lot of money.

Nathan Latka

06:23What I'm saying is relative to what? I mean, the three episodes before you were 50,000,000 raised, one twenty raised, and 30 nine 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 gonna raise capital. I'm gonna go the freemium model. We're going for a land grab and market share?

Christine Telyan

06:39Yep.

Nathan Latka

06:40Got it.

Christine Telyan

06:40Yeah. No. Fair 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, yeah, three three rounds of basically angel financing. I guess I see it as a lot of money because this is from our personal network of angel investors. And we obviously feel very responsible and take that very seriously.

Free User Acquisition and CPA Targets

Nathan Latka

07:05And 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, free to 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?

Christine Telyan

07:24Well, how you measure what it costs you? I mean, I think that for us, it's really around how do we get to scale that we think is relevant. So our target for this year, for example, is to be at 150,000, 200,000 businesses on the platform. And for us, we work back to a CPA that

07:46A, we can afford, and b, that makes sense in the context of longer term monetization. Now, we have the plans that I mentioned, but beyond that, 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.

Nathan Latka

08:14And how aggressive are you being though on CPA? So today to get a new free user, are we talking cents or dollars?

Christine Telyan

08:20It depends on the market because right now we have customers in The UK, Spain, France, India, The US. I mean, of these markets... I be clear, we opened India, Spain, and The US just this month. So the growth is palpable, but it's very fresh. So we're still discovering what those CPAs are. But budget and lifetime value focus. But we're focused on building a very large base of small business users.

08:54And 200 to 300 business sign ups a day is not trivial. These aren't customer... End customers, b to c business. It's it's... It represents something else.

Nathan Latka

09:05Well, so, Christine, I I wanna try and understand actually. I mean, you have to have cohort... I understand you opened in 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, we talking a dollar for a new free user or 10¢?

Christine Telyan

09:19You know, as I say, that depends on the market.

Nathan Latka

09:23Pick a market and let's go deep there so that we stop talking in vague terms.

Christine Telyan

09:26Sure, sure. I mean, on our specific CPAs for a market, you know, I don't know that I'm going to share our exact figures, but it's more how we think about can we afford 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 business customers this year, you have to be pretty modest. And obviously there's a portfolio of organic sources as

09:56well as paid sources. Sources.

Nathan Latka

09:57Across all your channels, no matter what the market is, whether it's India, China, US, whatever, the most you'd spend for a free customer is what?

Christine Telyan

10:07Well, look, I mean, you're targeting something, you know, three to five pounds,

10:15but it's often going be very much less than that.

Nathan Latka

10:17Yep. But 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.

Christine Telyan

10:24For a given test, 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 you have to be in that range.

Nathan Latka

10:34And then you mentioned earlier, you base this 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?

Christine Telyan

10:43Well, 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 towards.

Nathan Latka

10:53That's what I'm asking. What is that number?

Christine Telyan

10:56Again, right now speculation because again, we don't think that these plans are the only future and it's really not our focus right now. But you can look at other comparable businesses and what they do, and they're between 5% to 10%.

Nathan Latka

11:16So you think you feel pretty good about converting somewhere between 5% to 10% of this free user base, call it 150,000, 200,000 by the end of this year, into paid customers at 10 a month?

Christine Telyan

11:24Well, I think that one should try for these kinds of numbers, right? They're reasonable. 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?

Nathan Latka

11:40So, I mean, let's assume all goes extremely well. You land 150,000 free users by the end of the year. By the way, what are you at today? Would you be doubling or tripling year over year to get to one fifty?

Christine Telyan

11:50No. 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.

Current Free User Count

Nathan Latka

11:58I 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, now, how many free users are on the platform?

Christine Telyan

12:07We're coming to about the 20,000 mark.

Nathan Latka

12:11Okay. 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 one fifty. Here's the assumptions we're making. Here's how it's gonna work. So 20 today.

Christine Telyan

12:24Again, I think it's really about the fact that I think the growth rate is the most important thing because it's changing quite so dramatically. The acceleration is there. And I think that's much more significant than

12:39the base so far.

Nathan Latka

12:40But Christine, true. I mean, you know this. You're an extremely intelligent person. Growth rate when you're small can be very misleading, and can can lead to a lot of hype where there shouldn't be.

Christine Telyan

12:50But 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...

Churn and Customer Health Metrics

Nathan Latka

13:01Well, is if they can... I mean, it is if if it is if they don't go out all... Nine out of 10 don't go out of business at the end the year. It depends on what kind of small business. Look, Constant Contact is a great example of this. Gail Goodman burned through 50,000 churn customers every quarter on our calls. Public markets didn't give her a good PE ratio and she flash sold essentially to EIG and she

13:18had millions of small businesses on Constant Contact.

Christine Telyan

13:22Well, 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 per annum. Absolutely right.

Nathan Latka

13:34Not even per annum, Christine. I mean, Constant Contact was 6% monthly.

Christine Telyan

13:38Well, I'm talking about what is the health of these businesses. But that's something for sure you have to watch. But when we look at our customer base, that's what we see as kind of the rate of attrition terms of how the health of these businesses is going.

Nathan Latka

13:54Okay, but what does that mean in terms of your churn? 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 7% per annum?

Christine Telyan

14:03Most of the people that are leaving are leaving either because their business closed or in some cases they're looking for a more sophisticated solution, like a more custom solution for their online presence.

Nathan Latka

14:16So is the answer to that yes then? The only churn customers you're seeing are the ones that go out of business or switch and it's about 7% annual logo churn per annum.

Christine Telyan

14:22Percent, the percentage, I couldn't exactly share, but I mean, as I say, on the free base, that is definitely the biggest reason.

Nathan Latka

14:31Well, does a free user churn? They're not paying, so what are they churning from?

Christine Telyan

14:35Well, exactly. I mean, that's it, We're talking about a free base here, so.

Nathan Latka

14:40So do you not have... You don't have any historical evidence or anything that are driving your assumption cells in your Excel sheets of a paid user base?

Christine Telyan

14:47No, I mean, sure you do. But, as I say, they're... These these are the biggest drivers. These are the biggest drivers.

Nathan Latka

14:55Well, 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 actually understand, can you monetize these users? I mean, why are you not measuring revenue churn across the base, the paid base?

Christine Telyan

15:07Well, look, for the small businesses, this is one of the biggest drivers. Right? And that's not true for a lot of products. Right? They don't have so many businesses going out of business. So for us, it's actually a structural consideration you have to take into account.

Nathan Latka

15:25No. No. I agree with you there. That's part of what I'm saying is Constant Contact at their paid user base. Ignore free. You're... You have to get like a whole another level before... So you're like at a free... Let's just talk paid at Constant Contacts level. They could not get churn below like 6% 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

15:43figured out a way to get your churn to 7% annually, which is like 0.4% monthly, that's incredible in this cohort.

Christine Telyan

15:52But again, to kind of set the expectations and be accurate, we're really focused on growing the free base today. So I don't have good data to share with you to answer your question.

Nathan Latka

16:05How do know when a free user cancels?

Christine Telyan

16:08Well, sometimes they ask us. They say like, look, I don't need this anymore. I'm unfortunately going out of business, or I hope to pick up the business later, this kind of thing. And sometimes they ask, can you take it down? Or they just let us know. So people are mindful that once they've set something up that they're not... Because we are focused on engaged users and that's something that is important.

Nathan Latka

16:33Defining engaged though, they visit the site once, they log into the admin section at least once a day, like what's engaged mean?

Christine Telyan

16:38Well, it's in course of a month.

16:44Have they taken any action? And we see that business owner interactions with their website over the last thirty days, we see on average them taking several actions. So that's something we monitor as part of the health of a customer. Also, what kind of page views are they getting on a monthly basis? How many business inquiries, like how many customer inquiries, I should say, the business is getting in a given month, because those calls, booking requests, that

17:13translates into real revenues for the business. So all of those are kind of customer health metrics that we look at. And yeah, it's a free base, but it's, it has to be an engaged base.

Team Size, Other Monetization Streams and DIY Competitors

Nathan Latka

17:26Yep. Talk to me a little bit more about your team today. How many folks?

Christine Telyan

17:29We're about 45 people, and based in The UK, Czech Republic, and, Ukraine.

17:39Very international team. I've kind of lost count of the number of nationalities, but English is second language for pretty much everybody.

Nathan Latka

17:46That's cool. Okay. So UK remote locations. Now you've raised 18,000,000, so obviously you're burning to try and drive towards that free kind of user base target of 150,000 by the end of twenty nineteen. Let's just make let's assume everything pans out like like you said it would. So let's say you hit a 150,000 at the end of the year. And let's say you do convert 5% of those to $10 a month. I mean, that obviously would

18:06put your your paid monthly revenue at like $75,000 a month. So still less than a million bucks there in MRR and ARR, even if everything turns out on 18,000,000 raised. I mean, how do you grow into the last valuation you raised at?

Christine Telyan

18:18But I think that that's the whole point. That's why I think it's, I know it's a standard kind of metric to talk about, but I don't think that it's really the focus necessarily for us because I think that there are other monetization streams. Here, these businesses are relying on us as their kind of storefront. So will we run transactions through the platform? Will we, through partnerships, do other kinds of relationships with other businesses and then do

18:46a revenue share by offering other products and services to our base? Those are other potential areas to explore. But if you think about it, how many businesses out there really do have such a large engaged base of small business customers? I mean, it's a highly fragmented market, quite difficult to attract and retain these businesses and engage them with the product. So we see value far beyond. That's why I think, sure,

19:20a calculation to do to say five, 10%, but I think those are kind of just arbitrary numbers.

Nathan Latka

19:26Yeah, Christine, you have to understand, my audience is listening to this going, of course she can say that. They've raised $18,000,000. 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.

19:46What was that? How are you able to raise so much and not give up a huge chunk of the company?

Christine Telyan

19:51Well, look, I think that it's really about, I think a fundamentally different model. 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 create a differentiated offering in the market.

20:14The ability to get quite so many businesses to be signing up on a daily basis, I think shows that. So this do it for me solution, I think, is really the key to that.

20:28Who else do you see out there providing a fully built with professional text optimized site for small businesses ready to go. Because

20:39Yeah, for free.

Nathan Latka

20:40For free. By the way, no one.

20:42And I think there's a reason for that. I don't think it works.

20:47Unless you have big rich people behind you writing you massive checks, I actually don't think it works.

Christine Telyan

20:54Okay. 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 any big businesses that have tried to reach out to them because they are quite so fragmented.

Nathan Latka

21:09But these things are free though, right? Mean, Christine, you have to be like 10 times better than somebody. I mean, Wix, Weebly, Squarespace, mean, all have

21:18tiers, right?

Christine Telyan

21:20Absolutely. But the question is how come these sites have not penetrated these

Nathan Latka

21:24I think they have.

21:25Millions

Christine Telyan

21:26No, they have of course, but there are, in The UK, there are millions 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'd say, 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 need technical skills. And even with a do

21:54it 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? As a plumber, do I know what text I need to write so that it's attractive to customer base and it's going to be optimized for search. That expectation that they're going know that and be able to do that themselves, that's difficult. So I think I...

Nathan Latka

22:19Look, listen, I agree with you. I agree with you. I agree with you on that point. I think maybe ask this last question before we wrap up.

Runway and Path to Monetization

Nathan Latka

22:27You're in mode right now of kind of figuring things out and you have some core assumptions you're testing. 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 when you consider your team of 45, whatever your current burn is and the money you've raised?

Christine Telyan

22:47Sure. I mean, the thing is we're not cavalier about these things. And so we have probably about a year and a half, two years to give us ample time to really make those targets that we're talking about. And I think a dent in the small business market to try to get these businesses engaged. And bottom line is this, that when we deliver them a good free product that then they begin to use, we put them on

23:21a cycle of then being able to talk to them about other services. And part of that is growing their online presence with the packages that we have. And in earnest, we're going to be working on some of those upsells in the middle part of this year. So Nathan, I'll report back to you, I promise, on some of these how that's going and are we above this 10%? But that's the point that for a lot of these

23:48businesses, 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 it's important to start building that trust with the free product.

Famous Five: Books, Tools and Personal Insights

Nathan Latka

23:59Yep, I hear you, very good. Let's wrap up with the famous five. Number one, what's your favorite business book?

Christine Telyan

24:04Probably Moneyball, I love Michael Lewis.

Nathan Latka

24:08Number two, is there a CEO you're following or studying?

Christine Telyan

24:12Guess I'm always watching Jeff Bezos. He's the master of the, the small business, fragmented market.

Nathan Latka

24:19Number three, what's your favorite online tool, Christine, for building the business?

Christine Telyan

24:24Probably DeepL, the deep learning language tool. It's a machine learning translator tool.

Nathan Latka

24:30Number four, how many hours of sleep do you get every night?

Christine Telyan

24:34I'm a big believer in sleep, seven and a half hours usually, but I'm eight months pregnant. So that's about four hours now.

Nathan Latka

24:41Okay, so married and how many kids?

Christine Telyan

24:44This is the first.

Nathan Latka

24:46Oh, first kiddo, very cool. Do you mind me asking how old you are?

Christine Telyan

24:49I'm 36.

Nathan Latka

24:50Very good. Okay, last question. What do you wish your 20 year old self knew?

Christine Telyan

24:54Yeah, be even more bold than you're inclined to be.

Nathan Latka

24:58Guys, be bolder coming from Christine. Again, launched ueni.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, has $18,000,000 to do it. Obviously, burning capital today. Team of 45 folks in The UK 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

25:25taking us to the top.

Christine Telyan

25:26Thank you.