Uptime Revenue, Valuation & Funding (2024)

hello everyone my guest today is jack becker he's building a company called uptime.app if you want to follow along it's a five minute knowledge hacking app jack you ready to take it to the top yeah hi nathan nice to meet you nice meeting you as well what does five minute knowledge hacking app mean so very interesting so what we do nathan is we take knowledge from all different sources so we we take from books we take from courses we take from documentaries and we hack that knowledge to condense it down into something a lot smaller um into a unique format that we've created that uh gives you the whole essence of that book or that course or that documentary in five minutes and and how do you know if it's working or not so there's a bunch of metrics you could track your business on number of downloads number of consumed pieces of content number of active users what's your north star sort of metric so the most important thing is that people like what you're doing so how do you measure that so what's the metric so so the the metrics we use internally we we look at hacks per per dau we look at uh how people are engaging with our platform we have some internal metrics around what we want to do around downloads and users but actually the most important thing for us is people on the platform when we look at it we can see already um because we're still very early we we really only launched um uh later in this year february time and we're getting around people completing about eight minutes a day average for which puts us actually probably close to tick tock uh territory okay so hold on so you said your number one metric is number of hacks per daily active user so what defines me what happens for us if i could let me just finish the question there can you define what a hack is yeah a hack is a five minute summary so we we call it five minutes because each of our hacks will take you about five minutes to go through okay great and you were going to add something on so i was just going to say that um yeah so so we're looking at what we can do hacks per dau ideally we'd want people to build a daily habit using our our product on a daily basis so how many are doing that currently how many daily active users so so right now we're we are we've got um about on a monthly basis about 35 000 active users and how do you define active do they just have to log in or do they have to consume a certain amount they have to they have to do a piece of content okay so at least so at least 35 000 people in the past 30 days have consumed at least one five minute hack that's a book review a podcast review something like that correct okay interesting a report or a documentary yeah okay how are you getting like where are you getting this content from you paying someone else to curate it for you or you guys have your own big internal team doing this how do you get it so the the cut we we so part of the things we do is make sure we get the right content so that's part of what we do um and we take that content and and we use a mix of machine learning and human curation to bring the whole thing together so it's a whole different things process machine learning human curation to bring a hack we do it that way so we can scale the business so right now we can produce we can do a hack in about a couple of hours whereas someone else would have to read a whole book do the whole thing etc so we have a process that enables us to to scale that so tell me about that process right so everyone knows uh the book the intelligent investor one warm up of its favorite books it's in your screenshot in terms of what you guys recommend walk me through the process you use on that book where you don't actually have to read it but you're able to pull out the top insights so so we we have our uh we can take the text we have our machine learning we go through what that is we also cross-reference that with a whole bunch of other things i'm quite going to each part of that detail but we go uh across the web and across a whole bunch of other sources about where that book contextualizes and sit and we we bring that all together to find what are the key points the key elements and one of the things that we need to take out and it's then reviewed by someone who's actually read the book and and will check and double check what's in that and and how do you find the person i read the book uh we have a we have a a system that we've created that enables us to do that well i assume that but what is the system how do you find that person um we i i mean we have people that um can go out and and look at people with subject matter expertise in different areas and we we build a team of people who can do that so i guess who who was the person that did the final review on the intelligent investor uh i don't know the actual person who who did that but it would have been someone within our team so it is someone who's full-time on your team yeah yes absolutely how many people are on your team um we have 45 people in the business 45 okay you just got going so you must have raised a bunch of capital to get this thing going yeah right right um 20 million okay so 20 million bucks and and you must have some background that enabled you to go out and tell the story and raise 20 million off the bat tell me more i'm missing a part of the story here so so nathan um we um i've done i've done this before so this is not the first time that we're we're doing something the last business i did uh was in the hr space it was in the well-being space and we did mental physical social and financial well-being what was the name of that company it was called lifeworks okay and uh we built that business over four years um we touched 13 million employees and had a 100 million ar revenue which was sold in 2018 17. how much have you guys raised to build 100 million ar we raised at the time uh seven million gbp okay so i mean then pretty i mean pretty capital efficient was there any was this traditional sas margin where of the 100 million it had 85 margin or did you have a bunch of people you had to pay out our big no we had we had we were we were services so we had both uh people i see icic got it so services company in the hr tech space uh you guys i'm read i'm reading as we're interviewing here right so so it looks like this happened more now shuffle inc acquired that come on 2018 correct yeah why did you guys sell that company why was it the right time to sell well um it wasn't about the right time to start actually we were just gearing up for our next phase of growth um and when we went out to the market uh everyone loved the company so much no one wanted just to put a slug of money in just to help grow the business they wanted to acquire the whole company mm-hmm so we we just swear so we just went and and sold and did you sell and it's what was your role there by the way i'm reading jamie true was the ceo uh some other folks what was the cfo at the i see okay so see i thought that company um you guys raised 7 million you grow gmv you end up selling now did you sell for i guess more than 1x of that 100 million gmv or under more yeah 325 million that's great okay so and and so how this is this is relevant because there's a lot of sas uh founders there will be suspenders listening right now that start off in services or agencies and they're always wondering how to value their agency when they go to sell it to move into sas so what multi if you sold for 325 what multiple is that on your like how was it value is it top line services revenue bottom line profit um so actually it was a mix of both okay so we we were we were a profitable business but we chose to sacrifice profit for growth um to to really make that go on steroids um but when it came to the purchaser the purchaser would be anyone looking at the business would be looking at well you're you're a mix of tech and services so your tech will probably be valued at blah and your services x so we'll come up with a multiple i think in our case it was um three and a half times so the blended multiple is three and a half times bottom line trailing ebitda uh off top line revenue forward looking or trailing 12 months oh wow that's great that's great that's not horrible at all very cool okay so this is this is why you are now able to go launch uptime up tell a great story here and raise 20 million off the bat now do you have co-founders at the company i do yeah okay how many jamie two co-founders jamie who've i've actually worked with for 20 years so we've what we've done we did life works together we did a number of other businesses together as well so it's just you and you and jamie are the shareholders right now along with the 20 million and then we have uh patrick who is also co-founder of the business so patrick he he's had a long career at google um most recently at facebook where he um he had a very senior exec role uh in emir around growing their partnerships and for instagram and instagram tv and facebook watch um so he's joined us as well uh as a co-founder in the business and uh so okay the three co-founders three co-founders where does james true come into the picture so james is is a partner he is uh the guy i've worked with for 20 years and uh we we built we we we did lifeworks together and we're doing uptime together but you don't call him a co-founder call him a co-founder yeah i do oh you so there's four co-founders no three james james james and jamie are the same person same person perfect got it so three co-founders there now did you guys just go you know what we don't want to argue we're just going to go 33 33 33 how do you have the equity conversation it's always tough [Laughter] um yeah you know it's very interesting i think the most important thing about any equity conversation is that you're fair to everyone involved and that's the most important thing and you and you have to also recognize what each person brings to the table yeah the other thing about that is timing timing is also very relevant so it depends at what time people get involved in the business as well so someone getting involved a lot later will probably have less of equity than someone coming in right at the start yep okay so you just get going this year you're you're partnering up with your buddies again which is great you guys raised 20 million bucks you can go conquer the world you're already at 35 000 monthly active users you're helping people again consume stuff whether it's a documentary on youtube or a famous book or anything else you're hoping to consume or podcast something to consume this stuff very quick what's the revenue plan how do you make money here so revenue is subscription consumers or companies find it for their employees so consumers um principally uh i would imagine if companies wanted it we wouldn't say no but uh principally we're going after consumers and have you launched pricing yet are you still pre-revenue we we just launched pricing so it's very early days for us so we've just started going out with a subscription product um early indications look positive very positive for us uh we have to celebrate if you've passed your first customer though did you have your first paying customer we have yes we do there we go first paying customers okay and so what are they paying um so uh we we had a founder offer for people who came onto our platform okay um so right now if you came onto our platform you could get a 50 discount so usually it's 79.99 a month here yeah so you could get it for 36 35.99 yeah right okay okay got it so we're talking like you know it's like 650 a month sort of deal uh will be full price yeah full price yeah okay how did you come up with pricing there's a lot of people they don't know how to launch the pricing page it's not like oh boom here we go pricing we did a lot of research around pricing we looked at a lot of different businesses to see what they're doing we also spoke to um both apple and google around pricing and one of the key things i would say is you have to test um because you need to know what you know where your price value point is as well so one of the things that we're going to be doing is testing pricing and so how we go are you using any interesting softwares to test that stuff dynamically are you just manually hard coding this stuff um yeah we do use software who do you use out of curiosity um you're asking the wrong person there i do know that we we probably use about um 50 different software platforms i believe it uh within within the business to help us grow and i think in some areas it's probably even more so but yeah we do we use a lot of different third-party software uh platforms to help us with that let me get a sense of growth we know you're at 35 000 mmu right now but talk to me you know june's about to wrap up here how many i guess i guess the right question is we'll sort of go down the funnel here how many total downloads did you guys get on the app in june we did just so you you know within the first 100 days of launching we did a hunt we got a hundred thousand uh sign ups 100 000 downloads of the app 100 000 sign ups not downloads why would those be different because someone who downloads doesn't necessarily sign up so how many total downloads so we can understand how many with the conversion um i don't have that number right okay but it it was it would have been higher than the hundred thousand got it what would you be based on what you know from other industries google et cetera what would be a healthy conversion rate from a download to an actual sign up uh from download to sign up i would say healthy is about seventy percent sign up seven zero seven zero oh wow interesting why would someone download but then not sign up what's the friction yeah i don't get that i don't get that either nathan yeah people do interesting okay so so some people i think they feel they don't want to register for a product some people will have different reasons i don't know okay so how many new signups were you at in june um it's a very good question uh i think we will probably right now i think we'll probably add about um 15 000 maybe 20 something like that and and what's the biggest issue right now with converting 100 000 of these signups like you have drop off right 35 000 are the only still active ones the mau number you gave me so there's you know you're losing 60 what is that 65 okay then how do you re-engage right conversion rate correct my question to you is that like what do you have to do to get more of those signups to stay active to be included in your in your weekly and your monthly active user number have a great product experience why are they dropping off currently do you how do you do you get any feedback from people that stop using you do you have any way to do that uh no not right now mm-hmm interesting okay cool so so got it so um folks you have your first how many total customers do you have right now that took advantage of the founder plan um so so we could because we've just been 100 days since we we launched we have i know you're early yeah and we know you're early i assume it's a small number experience really it's really early yeah so how many you're past one but you're still early so i'm not expecting a massive number but i am curious oh i i um it's we've got several thousand people who've subscribed they're paying customers yeah can you break 10 000 subscribers this year paying subscribers you think i i think we'll easily do that interesting so so how do you manage cash are you you've hired up you're hiring a head of growth and the growth is coming now it's a lagging indicator it's coming behind that growth do you go raise another round you know early next year we will be raising another round early next year yeah for sure that will help us with growth there's a lot that we need to do growth with products with languages with um different territories as well so there's a lot that yep do you guys think you know obviously in sas whether it's really consumer or b2b the magic number is that million dollar run rate do you guys think you can get to that by the end of this year or at least maybe early next year uh maybe uh i don't know we'll see i it might be too early because we we started later in this year so yeah we'll get there yep yep i mean i have you right now it's you know a couple thousand customers caught maybe five six thousand at fifty percent of an eighty dollar acv right that puts you guys at something like fifteen or sixteen thousand bucks center at least a diver like sas revenue right now per month so it's a nice the nice chunk of capital right up out of the gate to sort of prove some of your points yeah it's it's a good start are they churning do people stick uh so far people have stopped we we haven't seen much churn at all so when did the first person start paying what month uh in maine okay so so okay there's really only been like 30 to 60 days here so no we haven't we haven't had enough time yeah yeah yeah what would be what would be a warning sign for you so if you get the june cohort data and x percent churned in june who signed up in may what would be a worry some number i think the the the worry would be if our if our actives are going down that would be a big big for us actually really we just care about growth and ensuring that the the cohorts are going up yep uh it's really about stickiness on the product people liking what you're doing and coming back building a habit yep every day within five minutes get your five minute hack a day and that's what you need yup i hear you okay last question before we raise up people always valuations on first round it's a combination of things that are not science it's very much art you guys had a great background you probably had much more leverage than most of my listeners but just help me understand how you thought about negotiating evaluation on the first round pre-everything pre-mvp pre-revenue yeah it's it's really about having a trap the the more the bigger the track record you have the the higher the number you can go and that's it that's really what it's down to um yeah that's really what it's down to and most people on that first phrase are selling between sort of 10 and 20 of the business were you guys sort of in that range yeah most people would be 10 and 20 percent of the business yeah and were you guys in that range we were in that room okay great very cool all right man let's wrap up here jack with a famous five number one favorite business book um what they don't teach you harvard business school number two is there a ceo you're following or studying um no number three what's your favorite online tool for building up time favorite online tool for building up time uh google workspace number three four how many hours of sleep you're getting every night probably about six okay and situation married single kids no any kiddos no kids okay how are you jack sorry how old are you 52. last question what's something you wish you knew when you were 20. um [Music] it's a very good question i think i knew it all at 20. and now i still think i know it all guys there you have it uptime map that came out of gates blazing raised 20 million bucks uh sold 10 to 20 business to do that they're trying to help consumers go in and engage every day to get bytes of information out of their favorite books documentaries et cetera but much faster they've got 35 000 monthly active users meaning they come in and engage and download at least one sort of summary per month they have over 100 000 sign ups over their first 60 days here they've got several thousand people but less than 10 000 paying eighty dollars for the year but at a fifty percent discount for that early tranche and they're hoping to hit that million dollar run right here in the next 12 months before going out for another round of capital early next year we'll see what happens jack thanks for taking us to the top thanks thanks 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 world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys support all right i'll be in the comments see ya