How Vacationtracker CEO Lav Crnobrnja grew to $2M revenue and 200 customers in 2024.

hello everyone my guest today is he's building a company called vacation tracker the url put a dot io on the end he's been running a web and mobile development shop for 10 years launched vacation tracker about a year ago to solve their problem now this is interesting because he's also going in the middle of he's in the middle of getting a divorce and have 50 shared custody of his two-year-old child while managing and scaling two businesses juggling a lot love you ready to take us to the top uh absolutely all right so let's focus business first personal later what does vacation tracker do and how do you guys make money so vacation tracker helps companies like ours manage leaves for their organization um i mean i have two companies as you mentioned cauterize and invitation tracker so we tried to solve our own problem in cloud horizon as we were scaling the company we're having trouble keeping track of who's in the office when how much time they had left uh you know for sick days for vacations and so forth and so we decided to build our own tool because everything we were trying it just wasn't working for us and we decided to build it directly in slack because our company uses slack a lot and we didn't want our team to using another tool like we used jira confluent a bunch of like tools to get our job done and basically we just said hey we're a software development studio why don't we just build this product and so is it pre-revenue today or if you have customers no we have customers we have about 200 paying teams okay help me understand how you decide to set up pricing right so on average what's the company going to pay you per month to use your technology so it depends like how big the team is we wanted to make it in a way that was attractive for startups and so the pricing plan is one uh one to 50 users is 25 a month like flat fee and then if you're bigger than 50 users we call that the future unicorn plan uh that one is one dollar per user per month okay so if you if you take both that into consideration the average company paying you is paying you about how much per month uh our average revenue per customer is about 32 u.s 32. okay interesting um and when you launch the company what year we launched it well i mean it's it's a bit of a story we actually been wanting to build a product for years uh we just never had time our our service business was being pretty successful in the beginning of last year we had some time to do it um so we started building it in january of 2018 we opened it up to the public we had a closed beta from like april until july of last year and then in august of last year we kind of opened it up to the public beta and we started having paying customers as of last september so about a year do you remember how much you spent in building the mvp before you had your first dollar revenue i i know exactly how much i spent i keep track of these things how much was it sales so we were at about 60 000 like canadian okay um before we actually launched and uh right now we're at about like 200 or so okay so 200 customers today paying 32 bucks a month means you're doing about 6 400 bucks a month in revenue is that right roughly yeah and where were you a year ago do you remember that's zero dollars you were pre-revenue okay so you spent to call it 200 grand ish building the product today you mentioned the service business have you raised capital to fund the company or are you funding it from service business revenue finding it from service we're bootstrapping it all the way so we're we're basically using the revenues we're generating from the service business to finance this that's great now you said the service business is super successful i mean define that for me how many folks are in that business wow super successful is a big word uh what's your word we have about 30 people in the team soon to be 33 we're hiring a couple right now but uh that's that's roughly the size of the company okay are we talking like a million in revenue last year there or two million three million what was the general scale uh it's in the millions but i don't really want to that company is like you know what we're discussing here today so i prefer uh you know i'm happy to share details about vacation tracker but cauterizing is a separate entity well love you talked about your family and your kids in a divorce and the bio so i'm getting the full picture of what you're working on that's obviously a critical component is how you're funding this company so if you're comfortable with it i'll ask questions about it uh i am but like just great so that business has about 30 to 40 people in it it's generating millions of dollars in top line revenue how did you make the decision to convince that team there that you were going to leave and spend more of your time on vacation tracker without hurting self-esteem on the service business well i mean i still work primarily on cloud horizon uh but we spend my partner and i we both dedicate like at least uh roughly a day a week each working on vacation tracker and we have a team that's kind of working on it as well and helping us out so uh it doesn't require our full attention how many folks full time are on vacation tracker two okay just i don't know and we have two part-timers as well that are kind of like uh you know the project manager and a qa person that are they're doing projects on cloud horizon and then part-time they're also working on the project and then my partner and i also we spend like a day a week what traction do you have to see on vacation tracker before you shut down everything else and go all in on it well i don't think i'm ever gonna go all in on it but like uh you know i might like hire like a ceo who's gonna help us run it like a little bit more effectively than we are right now but uh we probably need to get to about a thousand you know paying teams uh and we're well on our way i think like considering the amount we invested in marketing i think we've we've had a pretty good customers or success ericsson ibm h m we've got some pretty big brands using it like not the entire company but like smaller teams inside of these companies and so uh i think we have a solid enough traction to keep investing in it but uh to answer your question i'd probably split my time but i need to get to about a thousand thousand paying teams why or how much are you spending right now to get a new 32 a month customer we're really not spending that much we're investing a lot in seo and like long term uh you know like blog posts landing pages yeah that counts that's marketing spend that's inbound yes absolutely but that's you know that's inbound and we've spent very little on actually adwords facebook ads and things like this on paid marketing we spend very little yeah but if you look at your fully weighted cac to get customers that includes your sales people seo stuff direct paid spend anything related to sales and marketing onboarding do you know what your full weighted cac is i don't know i don't know exactly what it is okay so you said or the reason i asked you said earlier that you feel like your marketing has been pretty effective so i'm just curious how i mean how do you define pretty effective if you don't know what the number is well the thing is is that you know we've done a couple of things like my cto is relatively well known in the serverless community and he's been presenting at conferences and he's also like written a couple of articles for magazines and also for the aws blog and that's kind of brought us like a lot of sign ups uh product contour which wasn't very expensive like uh the free product hunt actually brought us like quite a bit of sign ups and now that it did it was around maybe 40 or something okay uh that was that was trials or paid paid signups it was actually paid we had more signups that was actually like paid customers but product hunt paid got us zero we invested and it got a zero we were extremely disappointed we spent a lot of time like and and obviously you know how much it costs to get a promoted yeah but it's like five grand right yeah it's like it was four thousand dollars u.s yeah and and we got literally zero signups and we don't know why because on the free one we got like all these paid sign up something we didn't even more than 40 signups so just be clear you got 40 paid signups from product hunt the organic one and you have 200 total customers today so product hunt has given you almost 20 of your total customer base today pretty much yeah yeah so okay that's very interesting so why i mean any rational person would say of course you do the paid version why did it not work we're not sure we're trying to figure that part out we just did it recently so we're kind of going through the numbers but honestly i wouldn't be able to tell you like we tried to do a slightly edgy marketing campaign uh where we were you know kind of trying to be funny and maybe we offend i don't know but we weren't super offensive or anything it's just that i i don't know honestly we're really like we're scratching our heads on this one yeah that's interesting um the organic stuff again that was back in um let's see when did you launch organically on product do you remember uh it was january 4th i remember because i was on vacation and we didn't launch on on productcon there was a hunter that added us and then i just got the email from my partner saying we gotta get on this right now like somebody put us on product cuts we're all scrambling to get up votes and stuff we didn't make it into the top five we're actually the sixth team for that day uh so we didn't go into the newsletter but uh but it was uh you know still relatively effective how many hits to the website from which one paid or organic organic organic one i think we had about 1500 okay and then 40 of them converted to paid yeah and we had roughly the same volume according to uh according to product hunt if we look at our google analytics we had about 700 um and so zero conversions yeah that's weird and you have 357 up votes on that one in case you guys are wanting to compare to your own products on launches um okay good stuff there uh talk to me about today scale wise i mean it sounds like you're burning capital to drive the growth of this business and you're paying for that burn from the service business so are you talking burning like five grand a month or 10 grand a month on vacation tracker or what uh it's about 12 000 and it's a little confusing like because sometimes i talk in u.s dollars and sometimes i'm talking canadian dollars we're based out of canada in this case because my you know part of my team is in serbia we pay them in your anyways long story short like in canadian dollars it's roughly 12 uh and our earnings are roughly 8 500 so we're getting close to break even um but we're not quite there yet yeah and then turns critical on a sas company what's your turn so it's tricky for us to to figure out what the lifetime value of the customer is we're basing it on churn and our churn is under five percent i wouldn't be able to tell you the exact number we're basing it on what stripe um uh is giving us as as the churn rate well why wouldn't that be accurate i mean if stripes if if they stop paying you it's churned so here i'll explain to you why because stripe has this stupid mechanism i love stripe by the way i don't want to say anything bad about stripe but they have one thing that's really stupid and that is if there's a bunch of failed payments that happen there's four retries that happen and if that happens like if after the fourth time like the the the payment is still failing it cancels the subscription and then that customer comes back and and puts in their credit card because they you know they're blocked from using vacation tracker and then it treats it as a new subscription so that it considers the previous one as part of the churn and like and now it just created a new subscription yeah so that return number inside stripe is not the accurate one according to the strikeout turn is five percent but it's lower than five percent because we've had at least ten teams you know this happened with at least ten teams like where four retries happen their subscription was canceled got it so worst case sixty percent annual churn uh yeah yeah i think this is the annual like the five percent is like on an on an annual basis oh i just asked if it was monthly i thought you said monthly so five percent is annual yeah i think it's annual yeah it's misunderstood yeah oh okay okay do you have any expansion revenue or no uh we do uh every month i mean i wouldn't be able to tell you exactly because every month is different but like we do have expansion revenue yeah because some teams grow and they pass from the 25 into the you know 50 plus pricing range so uh it expands uh every once in a while yeah very good all right let's wrap up here with the famous five number one what's your favorite business book there's a lot of them um i think i would have to say seven habits of highly effective people most information inside that one it's very uh it's a very good book number two is there a ceo you're following or studying uh i mean i think the classic answer is uh elon musk i like jeff bezos i like all the the tech the tech entrepreneurs i follow a bunch of them but elon musk's probably my my hero number three what's your favorite online tool for building your company slack number four how many hours you sleep every night how many hours of sleep do you get every night four to five and um how do you i'm almost forty thirty nine i'm like i'm twenty but i'm thirty nine all right very good thirty nine and then mentioned going through divorce right now you have one kid i have one kid he's a two-year-old and that's my most important startup right now so i'm managing three startups my kid is the number one and then i've got vacation tracker and cauterizing as well it's a handful take us back to your 20 year old self what do you wish you knew uh i wish i knew like how important you know this is a cheesy thing that everybody talks about but it's it's you know you you only realize it when you realize that it's like surround yourself by the best possible people that you can uh everybody talks about this but i don't think it really like sunk in until like in the last couple of years i've been doing this for 10 years and it's really sinking in for me right now how important and critical it is to surround yourself with the right people guys as employees and mentors and like just in every possible investors whatever like the best possible people you can find surround yourself with those because they're going to just bring you up guys vacation tracker dot io leave management for small businesses they currently have 200 customers about 32 bucks a month uh each 6400 a month in revenue right now up from nothing a year ago the product launch brought in 40 paid customers they're currently uh have two folks full time on the team five percent annual churn burning twelve thousand dollars a month to drive the growth of the company and they're bootstrapped to date funding the company from service revenues and their agency model which is a whole different business they spent about two hundred thousand dollars so far building out the product all right bob thank you for taking us to the top thank you very much