How Yva.ai CEO David Yang grew Yva.ai to $2.5M revenue and 496 customers in 2021.

hey folks my guest today is david yang he's the ceo and co-founder of eva.ai that's yva.ai he's building a tool that helps with ai driven real-time employee experience and performance management uh it's a platform that they're building out david you ready to take us to the top yes hi nathan it's great to meet you thank you when did you write the first line of code for this company it was uh about four years ago four years ago okay and walk me through what it does what are companies paying for um they are paying for top line and the bottom line this technology literally improves you know revenues performance and business outcomes it's it's about culture and uh workforce efficiency okay very hot hr tech is a very very hot space right now a lot of roll-ups happening help me understand what kind of customers are you targeting what are they paying you per month on average would you say um we have three types of customers regarding their size below 500 employees uh between 500 and 5000 in police organizations and extra-large about 5000 employees organizations no literally all industries um if you have hr uh function in your organization you are our client so the ones that are already paying you what are they paying you per month on average would you say uh excuse me uh how much yeah on average what are they paying average um it's forty nine dollars per monthly per year basically it's about five dollars per month per employee i see okay and an average customer that's signing up how many employees do they typically get started with um it's initially it starts with hundreds to a thousand between 100 and 1000 employees depending on the size of the organization and in three six months they typically um uh expand to sometimes to the whole population that's great that's great for dollar retention obviously uh help me understand what they're paying for so someone signs up for you they're paying for a thousand employees you mentioned cost savings walk me through how you help them get cost savings this technology helps in 29 different scenarios for example first two scenarios are connected to employee well-being and dissatisfaction factors this technology can predict um employees resignation even before employees actually decided to resign now this technology helps to understand our informal leaders it helps to fill the gaps of middle management so it speeds up your uh your growth in product uh delivery for example okay and david how many how many total sort of employees are on the platform today uh it's uh right now it's already above 200 000 employees we started uh actually we started sales end of 2019 we had only 49 paying customers in the beginning of last year but we grew up we grew 100 excuse me 10 times during last year and ended up with 496 employer connected organizations end of last year so we're growing very fast how many are you at right now so 496 at the end of last year how many today uh we today's uh we are going to um close this year with but what about today what not not not in december like today how many organizations i would rather skip this uh answer but um i can tell you that this year we will not uh will not grow 10 times but still it will be several times growth so so when you say that there's 200 000 employees on the platform are those across all of the paying 496 companies no it's 200 000 employees connected to the platform are not all the pain um customers um it's uh we have different uh rollout schemes so some pilots are starting with non-paying licenses i see i see how many paid employees are on the platform that's what i was looking at because that's where they were usage comes in some numbers we don't disclose right now this moment we uh so we the company is on early stage and we just uh closed our seed round we will be closing um a round how much did you choose to raise in the seed uh so far we raised 12 million dollars and we will be raising eight million dollars in our current upcoming current round so how much was the seed round you just closed was the whole 12 million in that one round we we had actually uh not one seed round last seed round uh if i'm it's five million dollars i guess i do it was uh one and a half years ago okay so the most recent round you closed one and a half years ago so in 2020 and that was a five million dollar round yep i see and then you did another seven million before that yes okay what was that did you did you raise money right when you launched this company in 2014 uh the company spinoff from our my larger organization i started 12 companies so far my largest organization called abby abbyyy.com it's a leading company 1300 employees 50 million users worldwide so abby eva started as a design lab inside abby and when we spun off the company it was just three million dollars we received right away when we spun out the company sorry i didn't understand that three million what we it was investments from the parent company abby when we spun out the company so abby put in 3 million in 2014 to get it going yep but that's but you own 100 of abby right no no no i'm i'm the major shareholder but the company is mature enough i i don't hold uh 100 i'm my family is uh still major shareholder of the company but it's not 100 unfortunately i see i think unfortunately i don't know we have almost a hundred uh employees early employees who are now um shareholders so for my company yeah and this is that i believe abby is playing for the document conversion space that was founded back actually a long time ago 1990 i think and you guys were pretty capital efficient you raised about 6 million there uh abby yes we started in actually 1989 when i was a fourth year student me and my my my friend and i uh we started uh the company many years ago um what was your question please uh no i'm just understanding there's all kinds of ways to start a company right so what you did is you just sort of spin it out of another company uh the other company fueled it with eventually a three million dollar seed check back in 2014. you've since raised another 5 million in 2020 um we're still missing a bunch though because you said you raised 12 million to date right yeah it was several actually it was three seed rounds but uh is it so interesting that little probably yeah i mean uh uh i'm well uh maybe the most interesting part is actually what we're doing and uh well david actually there's a lot of people that have really big ideas about what they want to do but if they can't tell a story and get it funded uh it's not going to go anywhere so we always on every episode we've we've done about we've done we've recorded raising money is the last thing you're thinking about i i when i started you mentioned in your bio uh how much you raised and what you were raising and you just said we're going to go raise a series a immediately so it's not the last thing you're thinking about because it's one of the first things you mentioned well it i just wanted to i'm just going off what you're saying so you led with we're about to raise our series a so that's where i'm going to ask questions do you want me to go somewhere else uh being on this both sides of this uh you know uh part of this business i'm a part of business angels uh this uh band of angels uh organization so i uh many companies come for it to me uh to to get you know investments i can tell you uh if you have product market fit if you actually solve actual problem actual pain point of your client if you are growing no way you cannot find investments investments will find you so i'm when i speak and i give my lectures about about entrepreneurship i always tell don't think about investment please it's not your problem your problem is product market fit david i can't tell you how many founders raise money before they have a line of code written there's no product market fit at all and they have to raise capital to grow so i i disagree with your statement there are plenty of founders in fact the majority of owners who raise vc raise a dollar before product markets oh i know i did the same several times so then why so then why do you just make the statement you made because the most important part is product market fit is a product hypothesis is very important and of course thank you for those business angels thank you i can thank myself when i invested several times on just an idea just in a people in people i trust and there but but still uh this is this is okay i mean if you have business idea a business hypothesis you want to try your business of this if you have so-called three magic crystals um in your pocket when you start your business okay you you will get your money uh depending on your three three magic crystals you have you might have one million dollar you want david i think the best way to get into this is to talk about what you've done with eva versus telling like telling people here's like the plan you should do it you're doing this you're growing a business so let's focus on eva right so so tell me more about product line right so so where are you going obviously it's a hot space there's a lot of money in the space right now why are people paying you versus the other traditional players in the hr tech space because uh traditional employee experience technology is broken this is traditional by the way can you name a couple of your competitors oh hundreds tens that lettuce green 15 5 pecan culture amp etc uh you name them all traditional systems employee experience systems...