How Valopes CEO Octavio Torres grew Valopes to $54K revenue and 3 customers in 2019.

hello everyone my guest today is octavio torres he is the an eco-friendly uh colombian entrepreneur uh and founder currently of lopez a tech based company focused on digitizing the waste industry in order to decouple waste from the economy octavio you ready to take us to the top yep all right so tell us about the company what does velopez do and what's your revenue model how do you make money well basically what we do is we go to companies and try to help them digitize all the environmental info nowadays we're focused regarding the waste and by product info usually what we find out is that they use they make this process in a paper base and excel even though they have earpiece and sap for oracle at least here in colombia and in chile bitcoin so octavio sorry just to be careful when you say digitizing waste do you mean like physical waste in their trash cans in their office yeah i'm talking about like the industry digitizing the information regarding how much waste to generate which type like shorten it out and then but when you say waste you mean specifically like banana peels on the trash can in the office yeah but let's say that we're more focused on industrial waste so it's like uh manufacturing facilities where they generate a lot of cardboard or plastics or a hazardous waste that needs to be incinerated so it's kind of a more complex amount of uh waste streams got it now um what is your revenue model is it is it a sas based model yeah it's a it's basically a sas model where we have uh an implementation phase and discovery phase and then just uh license fee monthly with a basic package okay that comes with different types of users an administrator supervisor and then the guys that just fill up the data and then decide on average what are companies paying per year for this here in uh in colombia the basic fee starts uh for a year two thousand four hundred us dollars uh in chile it's a bit expensive it's uh around uh almost double uh four thousand uh usb so it's about it's about two hundred dollars per month or twenty four hundred dollars per year yeah that's for a company that has three facilities well what's your average the average company with you is how many fans like nowadays we we have started focusing on big companies so some we have tickets of 3 000 per month others that are near uh 2500 but there are a few for example coca-cola or like big ballerina but october yeah this is this is straightforward math if you add up all of your customers and add up all the locations and divide it's near a thousand us dollars the average price more or less a thousand dollars for a year yeah yeah no for a month for a month a thousand a month great okay cool and tell me your back story when did you launch the company what year 2014 i started good idea uh we got some funding from startup chile and how much have you raised total uh we have raised so far 60 000 us dollars equity free money so we haven't gone yet for a serious funding round we're actually looking forward for this year how much how much are you hoping to raise uh we will raise near 500 000 us dollars more or less uh it's like let's say that so far we have been able to cover up our cost in a bus dropping way with the clients we are having so so are you so are you burning cash today each month or are you about break even no we're burning a bit of it still like how much like five thousand bucks a month or ten thousand it's less like three thousand okay that's not bad no i don't know like we have been really boost wrapping so in that sense uh yeah has been like really long period but the good thing is that we have been able to get or gain good accounts and how many accounts are you up to now how many customers we have been that are paying three customers uh that's that counts for near 200 uh establishments that we have been digitizing and there's three customers or there's 200 customers no it's three customers that between those three they have three uh 200 establishments so let's say femi cola has 27 establishments where they are using our solution okay uh there is another one that has 60 establishments i understand but are they paying a thousand dollars a month per establishment or those three are each paying a thousand total per month no no uh femsa it's paying uh near 300 3 000 per month prodenza how much sorry this is very confusing let's just simplify it about how much are you doing per month right now total in total we have inner revenue of uh like yeah like 400 4 500 or less per month per month yeah across three clients more than three yeah okay got it so each one is paying on average about fifteen hundred dollars per month and you're saying they represent it's three customers that represent 200 physical locations yup okay um that seems like a lot of locations for but i mean but you're only making 400 bucks a month from those locations i mean are you why is it so cheap why is it so cheap well basically because uh one of those that is the one the account that has the most so far uh they they're a waste manager so uh they just have like a user with several locations and not several users per location so each location extra it's like one box extra so and then it's a scale so where were you exactly if you're doing 4 500 a month today where were you exactly a year ago in march of 2018 we were launching the beta with no in terms of revenue so pre-revenue we just signed our first clients for the implementation phase that was a contract of near 7 000 us dollars but was for a period of six months for doing pilots so over the past 12 months how much total money have you made when you add the sas revenue plus the setup fees uh so yeah like should be let me check because with our first client we signed for a license for a year so in in colombian pesos is like [Music] we signed for them for over 30 000 us dollars for a year and that was signed like a month and a half ago so yeah that's like the big one then with provenza uh you don't have to break down everyone i'm just curious total so like total revenue past 12 months is what uh should be uh i mean [Music] should be like near yeah 40 000 us dollars or less okay so so let me so how well let me ask team size today is how many people we are for the time we four four people okay so how are you you launched in 2014 you only raise 60 grand you have four people so how have you supported everybody for three or four years with just forty thousand dollars you know in annual revenue yeah that's quite interesting well let's say that we have had we had five or twice and what we do what we did in the past was basically we developed waste marketplace that didn't work then we did a traceability tool and that didn't work either mainly because we realized that was not the problem the problem was regarding the data so at the end with my co-founders i told them okay i'll try to figure out which hat we which is actually the real pain for companies and why they're not like having better uh solutions for their waste and we realized that was a paper base in that sense so my co-founders are the technical part so they're the ones building the solution while i'm like more regarding the vision and had the experience okay october sorry my question is really straightforward you have like bills to pay you have rent and food you've been doing this for four years also as well i have been doing consultancy okay got it so people everyone's doing stuff on the side to pay the bills yeah yeah yeah i like teams this year i've been just focused 100 percent in by lopez but in the years before doing consultancy without stops okay and where's everybody base the team uh tech team is in santiago i'm based in bogota so you're going to rate you want to raise 500 dollars you're doing right now about fifty thousand dollars per year so what valuation do you hope to raise at uh well that's a good question we're hoping at least to give ten percent or like get ten percent for those five hundred 000 so it should be 5 million but we have to work for work so what we're doing for that is that now we're running pilot free with companies for a month like big corporations as well and hopefully closing in a couple weeks with a couple of them so that's like our new technique like go make them use this solution for a month and if they like it they pay their license for a year oh no i mean obviously that's how sas company works but i mean when you look at what you just said you want to raise 500 grand to give up 10 for a 5 million valuation you're currently doing 50 000 annually i mean you're asking for like what is that that's 100x yeah well but the good thing is that uh we have like right now 10 pilots with the companies well so you're going to close a couple of those first before you try and raise yes very good all right let's wrap up here with the famous five number one octavio what is your favorite business book my favorite business book book uh i'll say it's um i don't know let's let's check out right now i'm reading one that it's quite good that uh what's the name being fast and uh think fast and think slow thinking fast and slow number two is there a ceo you're following or studying um i've been checking out a lot of what uh uh let me check yeah well there is this guy...