How Weblium CEO Victoria Koko grew Weblium to $7M revenue and 3.3K customers in 2024.

hello everyone my guest today is david braun he was born in the USSR got a war was in a war there was a refugee moved to Ukraine and then co-founded template monster.com he even grew that 200 million it come by a hundred million a company and sold it out to a private equity firm since then he started a company called Webley him to build a McDonald's in the web design industry he's married with four kids two wives three dogs five homes ten thousand seven hundred phone book contacts a hundred conferences a year military business and doing and having a lot of fun when the war started you crane he founded the largest crowdfunding platform people's project calm to help wounded soldiers become became an advisor to the Ministry of Defense and a civil activist David are you ready to take us to the top yeah sure okay so how do you manage two wives in Ukraine four kids and all this other stuff you're doing that's a good question well basically you know like when you get a divorce most of the people they get mad at each of you know each of them and then they the kids usually suffer and then when they started I'm a sales guy you know like I'm selling lots of great stuff you know like so I know like what's the mindset is so I went to my wife so they said there is a grace periods like when she's like really mad at you because you kind of you know like disappointed her so wait until the grace period ends it usually it's about six months then go and talk about the future if you were divorced yeah worse you like exploration periods you know like it is about six months and then when you go and say like what would be the future and then usually you're talking about the guarantees so what I did I did a structure 18 years plan so I put the money in the bank so like she was super sure that you know like I would not leave her without you know like without the financial support and so on and the kids already divorced yeah exactly and then you know like so now she's a good friend of my existing wives they go to vacation together you know like so it's perfectly sorted out my friends do you have a joke say when you get ready to retire you're gonna work in the United Nations as a peacemaker so you literally pay your ex-wife eighteen years some amount of money every year to keep her happy basically yeah it's like it's a mix with not to her it goes to her and in my son you know I see yeah they're so like they live together they have real estate so once the financial question sorted out so emotions are you know like became better better yeah now is she remarried yeah she's she's already and you know like I know the guy like his good guy so now it's everything is so I'm happy now okay that's good take me back to your first it sounds like your first big win template monster.com so so it sounds like you were a refuge I mean how soon did you launch that company after you are a refugee and moved to Ukraine yeah it was 16 years ago like I was first degree student in the university I met a guy from New York and we we kind of like got together well and he offered me to launch the digital agency like web design agency and so we I was like an outsourcing division you know like cuz labor cost in Ukraine are were much lower you know like then in the US and then you know like we when we started web design we kind of didn't like it because like there was a lot of back-and-forth communications and lots of you know Corrections and revisions and then you know like I found my most productive designer he was really fast he was using some sort of elements you know like to complete the websites and I asked him like what are you doing what what do you use it see like it is my template and I tried to google it not Google Google was not existing back then you know like it was Yahoo so I searched for it and I I found that there were no templates for web designers so like we asked him to create thirty first templates we polished online and within first couple of months we took we got like $70,000 in sales and after two years we got like 1 million dollars in sales then I created affiliate program we got like 10 billion dollars in sales like it was growing and booming we basically created web templates industry no and what year is this it was 2002 ok so and and when did you sell it what year 2013 because we got there evolution in Ukraine it was uncertainty you know like I and my senior partner he became he got a cancer so I had to be with him with Israel and in u.s. so I decided to sell the company okay and in 2013 how much revenue did the company do I was twenty five mil a year okay and where your margins crap because you were paying affiliates a huge chunk or no no no we was like super profitable with 70% margin to the bottom line our gross yes yeah bottom line net okay interesting so what'd you sell it for higher meal okay so you saw 400 million so 20 bucks so basically Forex top-line revenue but it sounds like to us cash flow to work with as well okay and were you the sole founder Jeff co-founders there you had a I know he had one do you have any others no I I had another one he's like so like there was like a private deal like a private equity like a family a family office they want it just cash so our the condition was as long as we continue delivering the forecasts in sales we could do whatever we want we just so they do not interrupt into operation so I have a contract until 2021 and then you know like the contract expires I stay in the work and I go you're still working full time than in this in the business right kind of of course I have operational directory so I usually like supervising I see I see okay and what component one hundred million was cash upfront cash upfront was about 45 okay so the rest is kind of your X Gina sales plans and some general structure exactly okay got it so I mean if you have three co-founders there's 45 million cash upfront is fair to say you know you're taking on 10 to 20 million air you're using that to reinvest something like that exactly so that's why I started Webley you bozo you know like I had a non-compete agreement so like I talked to the buyer because like slightly compared he competes with template monster but you know like I know we've got a strategic agreement that we would use actually template monster is a lead generation channel and we do like revenue share with with with private equity so what is web Veeam is it a SAS company as an agency yeah it's actually a SAS company but it works as an agency like you know like the problem with during tablet monster times we created over 1.5 million websites for customers as an agency basically and the biggest problem is you know like we use so many platforms like WordPress Joomla Magento you name it and the problem was once you create the website and you you you sell it to the customer after one or two years in a new version of WordPress comes in you have to patch it you have to update and do a lot of stuff and people at the end of the day like after three years you visit the web perfect website that you deliver three years ago nowadays it looks abandoned yeah we know like it's at homeless so I started to think about maybe we create a website builder but you know like wigs Squarespace we believe every one is on the scene right now if the clients people do not want to do it in do-it-yourself mode because the websites at the end are crap you know when you take a look and you see that you know like those websites are crappy really unless you are what David sorry I don't mean Cleophus so tell me our people what are people paying you per month on average would you say they actually pay me subscription $10 a month okay they paid it for a year so it was $120 a year and why would they keep paying you after you they get the website launched you saw we have a all inclusive platform it's good it's hosted with Google Cloud it has SSL Certificates we give you access to to the editor where you can update and manage your content so basically you don't work it and if you don't if you are too lazy most of our clients are lazy you can buy webmaster hours just inside the control panel so people usually buy 10 hours it's enough for a year $100 we charge you and you get 10 hours you we have a slogan cold there is a guy for that so you need to prayer to put a press release on the website you send him an email and there is a guy for that so he publishes the press release for you mm-hmm okay are you I mean it sounds like this is almost like human powered software though most pure-play software companies well there's no human kind of touch involve or haven't they have like 86 percent gross margins do you have margins that higher or no there lower you know like it depends on the volume currently it's we still subsidize the business but from what I see right now we get a small studio with six people creates already 400 websites a month okay so my so my goal is to have a lot of French high studios all over the world we power everyone under the same platform so for the customer it looks like digital agency so because they love this way but on the back end it works as a platform which powers all of those that's why we can keep the cause for creation website very low okay and how many customers are here today so right now we have three thousand two hundred fifty something clock customers and we are growing right now about six hundred customers a month and what how much revenue are you doing monthly right now actually I'm not calculating you monthly funny I have like four hundred twenty-five thousand yearly revenue it's like it's growing like crazy month over month it's about two hundred fifty percent gross yeah so just be clear if you have three thousand two hundred fifty customers out about a $10 price point that's thirty two thousand five hundred per month annualized it's about 400 grand in ARR is that right right exactly and where was it out a year ago a year ago was non-existing that was developing the platform okay so we launched it about seven months ago great it used to so launch in 2018 which will late late 2017 yeah okay very good and walk me through customer acquisition costs what are you spending to acquire customers yeah that's a tough few do it a straightforward way like Google Adwords or Facebook Ads it is about $150 okay but I was smart enough because like I I understood that I could not compete with weeks which is spending like 10 billion dollars a month right yep so I started to do like a strategic partnership with banks because banks keep a records of the businesses so I go to the bank and say you know like we should we can make a website for the customer it cost $400 as a set up but what we could do you could subsidize it instead of the customer and build the loyalty for the customer so the banks pay us we do the websites for customers customers get digital you know like you look and digital world and it works so I already sign up five most the biggest banks in the Ukraine we work with two banks in Austria right now one big banking group which is covering 26 countries right now like we are signing up the contract okay sorry actually actually we do not spend any penny on the ads right now well you just said when you do spend though it's about a hundred dollar attack is that right yes exactly okay saying how much under fifty and how much are you spending per month total would you say direct paid ah we don't spend it you know so how do you account is 150 if you have no sample size just like no I tried it first month you know I tried it to kind of do my science like yeah it was a pilot so I don't think that it's the business model is really too much profitable you know like if you spend it in direct way how are you how are you getting new customers and you say they are exists in our customers a month where are you getting them from if it's not drug paid from the banks from the banks is you know paying the banks to kick back no no I don't pay do it why would they work with you they pay me they pay me why why would they do that I negotiation skills even why wouldn't they make you pay them for leaves why will you pay them a cut of the foreign dollar website that they drive you because because the bank because the bank needs that to compete with other banks right now and the pay the bank needs to be so much unified so there is no diversification point they all try to kind of become a universities for businesses they try to you know educate the business they try to bring some extra value and so on so they welcome you like a bank in Ukraine I'm gonna see at the teller hey sign up with us and you also get a website created with Webb Liam yeah exactly actually III I work with HSBC right now so you probably will see it you know like very soon and the second oz it's the second channel for us is that different incubators and accelerators they work a lot with the new businesses the new businesses needs and we pay we pay them commissions because new businesses need website presence you know this is the only way they can look so lit in the internet you know when they start we also work with company registrar's we signed up the deal with the one of the largest company registrars in the u.s. you know incorporation services yeah so why are they insane you must be paying them so I mean or or tell me the leverage you have on them why would they why would they give you this data for free because this way they increase the value of their offer call you're not paying them anything no no I subsidized I subsidized website creation on behalf of them so basically it looks like they are paying for the customer Johnny for example let's take yourself like you have a Catholic accom right and then you come you reach out your customers and say like I signed up a partnership agreement with Bob Liam and where we would pay we would cover the site creation cost for all of our subscribers and you only pay for the subscription why would I do that though I would never there's no value in me doing that with my base I'd pay for hundreds per website I'd lose money on that I make nothing why why you don't make that you don't lose anything first second you bring the value to your customers then I do some things I have to pay you four hundred perhaps I don't know you don't pay me actually i subsidize it for you but for your customers it looks like you were paying for them oh I see and then you're making money by converting the website folks into $10 a month subscriptions exactly so LTV is around five to six years so we basically return after investing into site creation we're getting back 600 to 700 bucks got it so LTV is call it 700 bucks something like that yeah yeah okay and what's churn today no churn for now but it's like too little I think that there will be some term but we don't have turn yet you have three thousand hundred fifty customers paying ten bucks a month ammas and a plus twelve and for the past thirty days you've lost none of those customers yes exactly I don't believe that yeah I can show you like after we finish the show I can send you the BI report but these customers go out of business I mean small businesses one of it's a nine out of ten go out of business so like it's not even your fault they prepare for a year so that is why we don't have any all of those 3,200 customers they pay for a year in the bad guy so you haven't had there's none of them have come for a renewal yet exactly okay God has anyone said hey I want a refund or hey don't renew name no cuz we have a money-back guarantee it was in 30 days so like if you don't like it we just return it back no questions asked okay well that I mean that's another way of asking for a refund right so how many times has that happened less than 0.5% something like two or three cases two months okay got it so we'll call it kind of 0.5% something like that very good are you bootstrapped of your race capital yeah bootstrap totally boots drive now are you getting funding for is the parent company feeding the private equity firm feeding money into this thing no no no like I do it with my with my partner all together with our own money got it very good and what about the team how big are yesterday right now it said about 51 people most of them are engineers we have five people in the sales team like to marketers it's relatively small but you know like for a start-up which is subsidized it's probably be kinda like fifty one person right now and where it is all based all base and key of Ukraine here okay good so I was gonna ask you you have 51 people you're only making 32 grand a month how the hell are you paying 51 people with that revenue it's because I guess talent is cheap there it's not that cheap because like I I recruit like one of the best people over here so we still we still not profitable we need our burn rate is about $85,000 right I was gonna say yeah because if you only use a thirty two grand you're making in revenue per month you'd be paying an average salary of six hundred thirty bucks a month yeah yeah so you're putting your on and the way you're subsidizing is you're putting in your own money yeah from the sale to template monster earlier on god I got it okay very good let's wrap up here with the famous five number one what's your favorite business book my favorite business book is Rob he'll kill Deanie seven Habits yeah exactly oh no no no not the seven Habits 100 forgotten influence invisible invisible power or something invisible power okay number two is their CEO you're following or studying right now yeah read passing from Netflix I really like love he's corporate culture stuff you know I I tried to build similar one number three what's your favorite online tool for building the business besides your own ha good question Gmail probably Gmail I'm spending most of my time there and number 4 how many hours is he forgetting every night not less than 9 hours usually I try to do it 10 ok good and what's your situation Merritt well I think your you say you're married now you have two previous kids at how many kids total total four kids right now I think I have a pose until I get profitable okay good and how are you yeah I'm 80 39:39 last question what he was sure 20 year old self knew huh actually I think that I did I had so many crises you know like in my life so I said like just look forward and do not afraid anything that happens to you guys look for don't be afraid from David he was a refugee he's been through a war he went through the whole thing with Ukraine co-founded tempeh monster crew 225 million bucks in revenue in 2013 sold it for a hundred million bucks to private equity firm 45 million that was cash up front the rest he's working right now through an earn out while he's doing that though he launched another company called Webb Liam which is essentially subsidizing the creation of websites for folks and then upselling a $10 per month charge in terms of a SAS model so they've now got about three thousand two hundred fifty people paying $10 a month for their service super healthy lifetime values right now with our team of over 50 people based in Kiev all right David thank you so much for taking us at the top