Vyrill Revenue, Valuation & Funding (2024)

hello everybody my guest today is AJ BAM he is currently the co-founder and CEO of viral vir I ll comm a UC Berkeley founded startup the company helps brand marketers make sense of user-generated video content on social media and leverage video intelligence for product marketing to drive product sales fit as yeah you ready to take us to the top yes and I love it alright so first off is the company a pure place ass company yes it is a company and we do some new business models as a licensing as well okay interesting so help us understand what the company does and then I want to learn more about your customers yeah so especially you know in a nutshell what the company is doing is we have trained machines to watch millions of videos on YouTube and Instagram to help brands like Revlon Porsche find the best video reviews unboxing videos and tutorials and all that for product marketing so so essentially the problem that we're trying to solve is there's massive amounts of video content being posted on social media and web from smartphones so a lot of brands the big brands are struggling with you know who's creating content for my product my brand and my competitors what are the on what platform when where and if someone made a very positive video review and unboxing video for my product I want to know first thing I want to know it happened I want to know who that person is and I really want to understand what's actually happening inside the video itself and you know whether it's positive or negative and then if there if it's a very positive review I might want to license that video for product marketing or if someone made a very negative comment I might want to mitigate that situation and we talked to that consumer and seiche and check in with them and see how I can help so essentially we're trying to help brand marketers make sense of all this massive amounts of video content on social media and web and really leverage all that for product marketing interesting okay so what's the average company paying you per year per month for the tool yeah so on average companies pay anywhere from $25,000 the I'm talking about the large fortune in thousand companies anywhere from twenty-five thousand two hundred thousand dollars a year okay and would you say the average it's fair enough say the average is on the lower and call it 25 guarantees about yeah I would say in the I would say you can say 25k for now yeah that's great and what is someone so when they sign up for some of that sends it for 25 grand a year versus a hundred grand per year what are the pricing axes your pricing against yes essentially our pricing is really tiered upon a number of products and SKUs so what makes viral very unique is that were able to map millions of videos on YouTube to product SKU category brand and competitor we then actually go inside the video itself and we analyze the video for sentiment topic scene demographic diversity brand safety product safety video stats and all that and one minute in are you using now are you basically transcribing and listening the voice of whoever's making the video are you actually looking visually using a visual API to look at the product that way program at Brookley and so we analyze video text video audio and video images and with all of these three analyzing all these three components of a video were able to filter all the content through those 9 different lenses that I mentioned before and then we're scoring the video so you know you know video is very rich right in Western accuracy rate in terms of I'm holding up a a Nike hat in this picture and I'm saying this Nike had his it ripped in the back I don't want it how many times we I correctly identify this is a Nike hat so by the way in terms of accuracy can vary anywhere from sixty percent you and somewhere in 95 percent range it really depends on how good or bad the video is depends on the volume depends on the English the transcription and all that so today we're mostly processing videos in English and the way we do that is we actually start with text because if you look at computing text is the easiest so we look at all the video metadata around the around the video you know title description comments transcribing every video as well the odd the actual audio then we look at the audio so the accuracy improves so if you can get the eye high enough accuracy from the text itself with a cat audio and then we look at images so in that order interesting you don't and by the way it's a very difficult problem to solve you can even searching massive amounts of video frames it's a very difficult problem not just for us even for YouTube yeah so I I I imagine it's a massive problem so put this on a timeline for me when you launch this company what year yes two years ago around October of 2015 and we had we did one pivot so so technically we launched our enterprise product that we have today about a year and half ago okay and how many customers have a scale to today yeah so today we have about we have two products bottle enterprises we have about seven big brands and working with us on pilots and then we have about 25 other customers on our VIP product which is the viral influence of platform and so the the VIP product so the pricing that I gave you before was for the viral enterprise and the VIP entropy the VIP is really the lighter version of the product and that goes for about $150 a month okay so a hundred fifty a month you've got 32 people on that and then you've got about seven people paying you know average a series of 25 bucks 25 grand a year all right so total right now what you're doing like north of 15 15 bucks re ten thousand bucks a month in revenue yeah I would say something yeah something in that in that range and where were you about a year ago so to be honest with you a year ago we were I would say our our Mr was somewhere in the thousand two thousand range and and honestly I think now we're at this stage you know it's taken us a while you actually build this bar it's a very difficult problem to solve but now we're finally there for ramped up so we're actually now ramping up product customers and and revenue and we're also announcing our licensing tool next month so essentially any creator will be able to log in with their and upload their video content and essentially monetize their video content through the bowel platform so our mission is we're vision is very simple we want to enable every smartphone user in the world to be able to monetize their content with brand retailers and publishers directly mm-hmm I mean it by the way this is something that YouTube should you I mean you're really playing to be bought by YouTube well we so essentially the difference is and YouTube is a very horizontal search were very vertical search so today we focus on beauty electronics automotive CPG airline media we're now expanding to other verticals fashion gaming sport and more so we do very deep vertical announces of for example we have trained the machine to recognize 50 different topics in beauty 50 different topics you know I get all that my point is though like you your system cannot get smarter without more video content to analyze that's how a machine learning and AI gets more intelligent and YouTube has the largest data set there so they will win this space the question is can you break off a chunk and get them to buy you right before they build this themselves right you could argue that or or maybe Amazon or Walmart could benefit from this - so it really depends yeah yeah yeah be bootstrap the company today - have you raised yeah so we were actually you know bootstrap for the first two years me and my co-founder dr. Barbara who I met at Berkeley and we have now raised 2.1 million dollars in in the past and we're currently doing another seed raise as well okay when did you raise the 2.1 it was end of last year okay and why is now the right time to raise another round we're launching the licensing platform and we need more sales and marketing dollars to really to start promoting that and I mean this is this is the first time video creators will be able to monetize very quickly with one plaque so it's like Airbnb for video and so we really wanna we need more sales and marketing dollars and we also need to hire more engineers as well on the team and a customer success manager yeah I'm so sorry no how much are you raising or looking to raise all right now we're raising a million dollars okay and is that gonna be on a priced rounder convertible note that's a convertible note got it did you let your first 2.1 was that a connote or equity did you let that first 2.1 roll and this one millions gonna be on the same terms really yes it made a lot of progress we have a patent as well fine now so essentially we have ramped up so the cap is higher what's the incur did you double the cap like what's the ratio but rotated to double it I would say that we increased it by 60% okay fair enough fair enough but still 20% discount 6% interest we are you doing a safe with no interest or is there interest no it's a suit convertible note it's not a safe got it so you'll have like 6 to 8% interest discount interesting and why not just do a priced round right now why do convertible note again so do honest with you like I think we can we will ramp up very quickly and shortly with as we when we launched licensing because finally we are weird actually deserving actions on insights and we truly believe that you know I think in the next six to eight months I think it's our valuation is gonna we are going to increase in revenue and more so we believe their evaluation will be significantly at a different place in a year from now the little impact is you say and how much we raise and and how much you know what what we own as founders as well so I think I think that's why we're waiting on the price Ron how aggressive being right now in terms of investing in growth in other words I assume you're burning capital how much are you burning per month so to be honest with you we are a very tight ship I would say that we are burning only about 100k a month we have a very unique model right now in the company we have kept everyone has the same salary in the company right now and we adjusted everyone's equity based on what they bring to the table and how many people do you have we have 16 okay so every all 16 people have equity correct and everyone is paid the same salary some some people are consultants right now so how many full-time I would say nine full-time and the rest consultants and interns okay can the consultants and interns get equity or no no not right now okay so nine people get equity and and the same salary actually yes they all the employees get the same salary and what we do is we also have a very unique hiring model we everyone comes we work with everyone as a consultant for four months and we see if we are a good fit for each other I mean you know I've met even like senior people who think they can work with a start-up but they but it doesn't work as a culture as in a culture pet even though they're a good skillset bit so four months is a good time to evaluate are for them to evaluate us and we're asking evaluate them and then if all that goes well then we make them an offer since everyone's paid the same I mean I'm gonna ask what do you pay every 172k seventy two thousand dollars and wars are won based so if they're all here in California okay so okay got it so you're basically headcount extensions right now annually about 680 grand something like that are you when you when you go out when you go out and raise this next round of funding how many months are burn are you raising four yeah so essentially you know cut revenues coming in as well so we're looking at another ten to twelve months okay so you're basically hoping to raise to buy yourself another ten to twelve months and then you'll go raise again and we do this movie I guess yeah interesting and what do you hope revenue is at that point after you after you spend a 1 million you get you 150km are by one day by I would say by March of next year February March yeah babe that's good and then um and you think most that's gonna come through this licensing launch no no so I think it's a mix of both I would say we're just launching licensing so I would say 80% is SAS Worrall enterprise revenue and the rest will 20% would come from licensing I think eventually that will sort of move to 50/50 and I think eventually I'm hoping that it will be in the 70/30 range yeah let's just think we'll take off you mentioned this next where you're doing is to do some marketing in sales of this new product do you have it kind of in any intuition yet on what you're currently paying for fully weighted cactii to 2011 customer um not right now I mean I would say that to be honest like it really depends on the size of the brand I mean for larger brands you know our deal size could be anywhere from a 200k to half a million dollars per question is there will you spend the full first year ACV to acquire the customer how aggressive are you being I think we are sort of semi aggressive I would say I think there's still a lot of things we're learning as well as we go along and I'm sure there will be some changes in the in the business model so we're submitting that out okay do you have any idea where it is though today the reason I'm asking is because you said you want to raise a million bucks to drive growth of the new product but you don't know what you have to spend right now to drive growth of your current product well I would say that I would say we're in the in the range of in terms of in terms of our sales and marketing dollars or spend would be somewhere in the 20 to $30,000 range per month mm-hmm to get how many new customers to get so essentially you know we're looking at if I were to get if I were to reach about 150,000 mr are we're looking at 20 large enterprise customers I would say about 10 min to your customers and I would say about 40 small VIP customers so let me ask this a different way again if you're gonna if I said hey i have a new $24,000 per year customer for you i'm you know i'm gonna charge you X for it what are you willing to pay for that new customer yes so essentially [Music] yeah I mean you mean in in terms of the cost of acquisition yeah I mean it's like a fairly standard thing to measure in sass right I mean I the reason the molle reason I'm asking is because you said so confident you're gonna raise a million bucks to drive growth you don't know what your current numbers are so it's you have to have two models right one is we have a direct sales force and then we also have we also have the VIP which is self signup things were that the VIP you have 32 people on it paying you said a hundred bucks a month that's nothing the other one is driving most your revenue so let's focus on that yes I'm just building up my sales team right now myself and an intern and I and I would say that you know we're looking to hire three more people in the next couple of months so an SDR and then two other sales folks so I would say I mean for you know if I were to break it down at a at a customer level I would say somewhere in the range of thousand to two thousand dollars to get a new 24 thousand dollar per year can count yeah I mean I think I think yeah I would say that could break it down into a customer level you haven't seen some where the two grand range I mean if you can spend two grand to get a twenty four thousand dollar account that put you at a payback period of a month I mean you should put a billion dollars into that channel so why aren't you growing faster well we're getting there I think the product is you know I guess like I mentioned before that we're improving the accuracies we're continuing to build a product as well you know more I mean I think I think the reporting could be more robust so I think like I said the product is work in progress we're getting there he launched in 2015 do you have a sense yet of what earnest yeah so honestly like this product is launched only 15 months ago so we like I said we did a pop pivot from B to C to B to B okay that's low enough though to get data that's 15 months of data yes I mean I think I think where we're coming up or so so far you know our first year contracts are coming up with renewal and I'm pretty confident that some of them will convert I would say hopefully hopefully most of them will convert yeah most of them will convert but I'm just saying on average you know I would say that you know my confidence level is somewhere in the 80 to 90 percent range how many have are you so 15 months ago means you've already had people hit their annual contract renewal dates so how many have that were notable yes with you like we also done some testing like we went initially after agencies and now we're selling directly to the to the brands so what we discovered was with agencies it takes a longer time and with brands the CMO and the VP of general marketing really get it they understand media so it's much easier cell going directly to your brand versus and what's nice I don't understand how that's relevant to my question which is churn right so of your ones that have already come up for annual renewal how many have not renewed so I would say at the moment it's it's just one okay so it's I mean that because we signed so essentially we the first year contracts are just coming up with renewal got it yes if you have seven people right on this contract and one has already turned so your turns gonna be definitely more than 15% annually yeah have you driven meaningful expansion revenue so someone that signed up for twenty four thousand dollars a year a year ago have you been able to expand that to like thirty forty or fifty thousand dollars yes we will that's actually I mean this is right now well you haven't actually done that yet not yet okay yeah got it very interesting good all right let's wrap up jay with the famous five number one what's your favorite business book what's my favorite business book to be honest with you I just read the Leonardo da Vinci's biography and I love it because it's it's a book about experiments you know as an entrepreneur you have to be persistent never give up and you have to just keep running experiments to figure out what your niche is and where you can get the win number two is their CEO you're following or studying right now number two is their CEO that I'm following right now to be honest I love Marc Benioff in general I think he has an amazing philosophy he's you know he's thinking big is thinking about his community as well he's giving back number three how many are sorry what's your favorite tool for building your company what's my favorite tool for building my company honestly I mean I love I love zoom okay number four how many hours of sleep to get every night by and which and what's your situation married single kids a single okay no kiddos and how old are ya forty five last question what he was your 20 year old self new sorry what do you wish your 20 year old self knew oh my 20 year old self new is you know I wish I was doing more of more of blogging and being an influencer of myself you know directly working with brands I think I think it's a whole amazing new world and the influence our world and how people are making their shopping journeys and who's influencing them in their purchase experiences so it's quite it's quite amazing now to be a 20 year old in this century viral com helping brands understand video content created by their users currently working with seven enterprise brands paying $24,000 a CV so doing about $15,000 per month in revenue they have done this by raising two point 1 million dollars team of nine they pay everyone the same salary $72,000 burning about a hundred thousand dollars per month right now it turns about 15 percent annually but hopefully expansion makes up for that looking at raising another million right now to fund the launch of their new product before they do a Series A hopefully at 12 to 24 months after that AJ thanks for taking us to the top yep thank you so much