How Zenspace CEO Mayank Agrawal grew to $1.4M revenue and 30 customers in 2024.

hello everyone my guest today is my uncle agrawal with a background in engineering and sales and a passion for innovation he uncovers ways to improve the spaces in which we work as ceo of zen space he and his team develop technology enabled office pods that create quiet private workspaces and open offices and public venues my auntie ready to take us to the top yes sir thank you for inviting me i always walk by these things in the airport and i go to do people use these you swipe your card on the outside and you probably pay per minute or something for a quick call or zoom call or something and i go i never see anyone in them though do they get used well uh so we are going live in public spaces uh uh from uh september 1st and you will start seeing them popping up in three cities to start with san francisco las vegas and philadelphia so uh honestly that would be the first time i will learn about how the experience is but by far we go to events and the usage is 100 we have a very hard time we turn around people actually come so we go to events for three or four days uh business events major large business events in las vegas and many other cities across the country and the usage is just phenomenal the feedback is phenomenal so okay so how many here's my question to you because i want to get a sense of kind of the scale of your testing so far um how many ven like unique pods have you if you take all the all the conferences you've gone to and you add up all the unique pods across all those conferences how many pods have you tested out in the wild so we have 15 pods in our inventory right now uh one five and uh we have been testing them in different sizes different numbers in different events and so the arrangement we have as event organizers we set up a business launch for event organizers and these are normally two to three day event uh in different cities so we bring them to the event and we tear them down uh at the very last day very easy to assemble very easy to move them around so uh we have done around 15 events so far okay so 15 times 15 units is about 225 kind of unique times each of these units has been in the wild yeah unique uh yes unique events um unique parts yeah absolutely that's actually great for the metrics okay and what does it cost what's the hardware cost on one pod uh you're looking at approximately 12 to 15 000 depending on the size give or take and we um you know uh so a two seater we have different dimensions of the part so two seater and four seater units is what we are promoting right now and the price you're looking at is around twelve to fifteen thousand dollars uh sorry how much twelve to fifteen yes to build and then what do the conference organizers pay per pod so we actually rent them for around 1500 a day fifteen hundred yeah okay yep on a four-seater on a four-seater unit that's the going price 1500 per day uh but having said that that's actually our even rental business uh we will be uh slowly transforming we will not necessarily be pursuing that business because uh we're going live in public spaces we are making deals with convention centers all across the country and uh the idea is to have them permanently placed inside the convention center rather than moving them in and out okay so what's the model there so then the model is actually we offer two different models that are leasing so a convention center can lease the parts from us on an annual basis and they can then rent it out or you know people can swipe the credit card and uh because there are smart pods i'm sure you're aware of that right yeah yeah so these are smart uh pods um um what would what would the convention center pay for a year for a four-seater to lease it um so a four-seater would be fifteen thousand dollars uh fifteen thousand dollars on a four-seater uh for the year for a year but it includes uh all the revenue collection maintenance we maintain a uh team of uh people in every city which actually does a daily run because these are smart pods it's uh it requires certain level of maintenance as well uh there is a technology upkeep uh hardware maintenance furniture and it's public usage as you can imagine in public when you have a product like this it does takes the beating uh from uh you know all kind of things whether it is the furniture itself there is a bunch of electronics okay so so got it so fifteen thousand dollars for the convention center the austin convention center in austin texas to lease one of these pods stick it next to the whatever the meeting or the starbucks in the convention center for a full year they can then charge whatever they want is it per minute per hour what does your software allow them to charge by uh per minute or per hour whatever that they decide they can actually tell us that what is the minimum time they want to charge on that specific part and our software platform allows them to configure them so we can actually charge for 15 minutes for instance i mean it doesn't make sense to go smaller than 15 in my personal view but uh it's a choice that they can make we can charge per minute or 15 minutes is there something related like surge pricing where during a massive convention they could triple the price point they can so right now the price change has to be done manually the the space provider the owner of the pod actually gets that gets that um you know uh a dashboard just like airbnb dashboard where he can change the pricing uh manually but at some point once we have enough data and our ai engine kicks in at that point we will actually also bring in search pricing kind of concepts yeah okay um so just be clear you've done 15 of these venues 15 conferences 15 units and kind of at each conference to test this thing out um how many unique people have like swiped their card or like gone in conference attendees oh so by the way uh event organizers pay us directly and most of these event organizers don't charge their attendees anything it's so so the price is set as freeze zero dollars per uh i know i get that i'm trying to get a measurement of usage though so how many times did it attendee go in or out of one of these right so uh we are talking about uh um so the signed users if that is a question that you have um we have currently around 3 000 users signed up uh on our platform at this point individual uh um uh users i mean of course uh they are one-time use customers because uh all these customers see them them at the respective event that they are yeah of course that makes sense yeah yeah that makes sense uh so 3 000 people have kind of gone in and out across the 15 pods you've put at 15 different conferences so there's 225 kind of uh uh days of pod availability right and 3 000 have gone in and out so i can take 3 000 or sorry to you know 3 000 right divided by the 225 instances you're averaging about 1.3 kind of instance per day pod well 10 uh uh well 13 approximately sorry sorry you're right you're right 13. yeah 13 per day pod yeah well 13 per event so basically you have uh an event is actually two to three days so you're looking at around four to five uh uh users per day per pod yep yeah is that right so 3 000 total you've done 15 events so you've had 200 kind of visits on average per event divided by 15 pods it's 13 per pop oh i see what you're saying yep you're right per day because each event is three days and then yeah it's two to three days event right yeah you got it you got it um and all this these have been free though right do you have any revenue yet yeah so we make revenues uh well uh i can't disclose the numbers at this point uh at the show but definitely happy to chat um if there is any uh further interest by uh people well i mean you've already shared you've already shared some i'm just asking did you give these away for free on the 15 test or did you charge me so there are very some events are so critical for zen space success you know promotional events so we offer a broader deal we don't actually charge the event organizer anything in return they give us free space so those are non-revenue generating events but i would say 10 of our events have generated revenue for us so far yeah that's great and you know just to give you a ballpark i mean uh you know you're looking at ten to twenty five thousand dollars per event uh revenue uh you know that's the kind of ballpark per event that we have generated yeah and i mean i guess what i'm trying to get at is actually like monthly requiring revenue but this isn't really a sas company well we are going to offer our pods in a sas model purely size model right so it's a subscription-driven model we don't sell the hardware so basically as i described 1250 per month uh austin convention center you give an example for instance uh they pay us 1250 per month that's all that's like hardware as a service it's not really saw i mean i guess i guess it's kind of like here we'll sell you an if you're airbnb we'll sell you a house we'll save the software yeah by the way we do use this term hardware as a service workspace service in our business plan so it's uh definitely a combination of hardware and software which comes together uh with you know uh which we offer as a service yeah okay um so how have you besides the 10 that have paid obviously you had to spend if they cost 12 you know 12 grand to build you had to spend about almost 200 grand building these things did you bootstrap the company or raise capital um yeah so well we have raised some capital we have raised close to seven hundred thousand dollars at seven million free and part of which was regulation crowdfunding as if you're familiar with that seedinvest.com and uh cnns.com yeah and uh that was early in the year and then we did um and and and half of that was actually done through the regulation d which is uh traditional angel investment and why did you use seed invest instead of like start engine or someone else in the space uh well it came through a very strong uh reference number one i mean a colleague of mine who uh they referred me uh me to seed invest i i really like that due diligence process they were very detailed and thorough in the way they actually um and of course you know i had to make uh i did not necessarily and i looked at the number of rays per uh one of the big things that i liked about seed invest is the due diligence process and the other thing was um the per ticket raise you know per race value which was quite high as compared to others yeah what's your uh what's your team size today how many folks we have uh 14 people in the company right now of which nine are software engineers and uh five of us are in to sales marketing and operations and so like i mean how aggressive are you being what i'm trying to back into is kind of how you're aggressive are you being in terms of growth so i assume you're burning but are we talking like 10 grand a month or 100 a month uh we are burning around we are spending around uh 50 grand a month approximately on average 45 uh uh we average around 45 50 000 a month that's total spend though what's net burning when you add back revenue yeah so um well so we have going into that mode at this point you know this is the time when i again i can actually uh uh give you more specific details offline instead of actually on a problem no no i mean this is a podcast interview that's why it's a podcast so everybody can learn yeah yeah absolutely so but uh we are actually uh going into a zone where we we are we are targeting around a million dollar plus revenue in this year i mean if that is actually uh something yeah so what did you what did you do total last year uh total last year was uh close to a hundred thousand dollars uh pretty good by the way for i mean it's basically a testing year yeah yeah absolutely so it's a pure uh testing and so we should be i mean and our goal is to actually so we already have deals and uh pipeline which we should be closing with convention centers to install a pro and we are actually onboarding a shopping mall in san francisco city for instance uh we are also uh and so and there are three three additional convention centers that we are working with so three convention centers in the shopping mall we're looking around 30 pods installed across these locations by end of september and our goal is to go to 70 to 80 pods uh uh by end of the year so a million dollars in total revenue 2018 is your target how much cash collected today so again i would i don't want to be very specific right now but i would be happy to share uh uh you know more detailed information uh well i mean you already sure did 100k last year right you want to do a million this year yeah we are actually at the million dollar mark i can't disclose at this point uh the amount of revenue and cash we have generated so far uh we are going through uh certain invest uh investment and auditing processes you just told me you did a hundred thousand dollars last year so you already disclosed that you already disclosed your target as a million this year i'm simply asking how realistic are your expectations right how much have you already done this year no we definitely so as i said you know i mean we are we are going into contracts uh we are actually already having all most final uh signatures coming in this week and next year i know i just i don't care about all that because contracts die at the at the finish line all the time that's why i'm asking how much has actually done secured in your bank to this point from a cash perspective you're talking about investment and revenue coming in from no customers customers real customers uh you give a range i i will actually be happy to share that number when we uh talk in person rather than on a public forum so at this point that's the best i can say nothing so uh okay look it's a little that's a little it doesn't all i'm trying to do by the way is make you look good right my job is to ask ceo's tough questions make them look good but see now you put yourself in a weird spot where my audience is going to be going wait he's hiding something he already shared some revenue numbers why is he choosing not to share this one so if you don't want to add anything else we'll leave it there and i'll move on um well why don't i actually let me bake this in is how is that important actually i mean why is that important because let's say you only have a dollar revenue cash collected so far this year you're basically telling my audience hey guys i have this super unique distribution channel where i think i'm going to close 99 of my total cash this year in the last six months and they would want to know about what that channel is that would be impressive um you know i don't feel comfortable at this point nathan to be honest because i think we are going through some investment due diligence with the uh private investors institutional investors but why mayank they're gonna you're gonna have to give them data anyway why the hell does that matter i will rather give it to them not to my and i don't want my competition for instance to be aware of everything that is going on but your competition already knows you 100 grand last year your target's a million this year they know your cost per pod they know your team they know you're burning they know your total expenses are 45 grand okay how about this so we are actually around uh a quarter million dollar in revenue so far okay so this is good so you feel like you're gonna get you know three quarters of your revenue here in the in the second half of the year you feel good about that second half is actually going to be a very busy second yeah what is um what makes i mean the the i would say the the biggest thing that i see you have to figure out how to overcome is the cash gap between paying to manufacture these things and your payback whatever your payback is per hardware unit which it sounds like it might be a year um is i mean is that ultimately why you go out and raise additional capital payback is less than three months it's very simple math i can give you a very simple myth one thousand two hundred fifty dollars per month uh you're looking at forty dollars forty five dollars or fifty dollars at the most per day uh the the venues that we are going into are very high profile venues some of the top resorts uh top convention centers in the country uh and uh they actually want to charge for one hour that kind of money fifty dollars per hour right for the events that they conduct so their breakeven is actually one hour per day you know am i on i'm not talking about their break even i'm talking about you if you're paying 12 grand to manufacture one of these things and you're renting it at 1200 bucks a month yeah you have to gap is basically a 12-month cash gap yeah but we have we have debt financing already covered so once we sign the contract we get debt financed from our bank okay yeah yeah that's curious so you hadn't mentioned that right so help us understand how you line that up oh yeah so basically what we do is when we sign a 12 month lease contract with a large convention we have some private banks and private individuals who are actually backing us up with those you know funds so basically what happens is just to give an example let's say you give a you know somebody is an investor who wants to write a debt uh finance check to us we they get 10 we get 10 discounted money from so we don't get 250 anymore we get 11 something uh uh which actually uh i'm sorry i'm gonna i just wanna make this simple for the audience let's say it cost you ten thousand dollars to build a piece in one of these pods you get an order for one pod today you know it's gonna take you a year to make back you know 1200 bucks a month you know over eight months gives you your 10 grand back you're gonna find an investor a debt from on day one to loan you ten thousand dollars right what are they gonna make in terms of interest on the ten grand so uh we are offering between eight to fifteen percent depending on the deal depending on the uh the deal we have the debt financing uh between eight to fifteen that's the current range and we have different uh investors at different price rates got it got it got it got it very interesting okay um that's good stuff uh you you're talking right now you might go out and raise you said already you raised 700k on a 7 million cap i mean uh right now if you raise what's the right amount to raise and why is now the right time uh 10 our seed round until end of june and we have some active discussions going on right now to add another 800 thousand dollars uh so we want to bring the race to close to 1.5 million dollars with the target for uh next round of series a towards uh mid q1 end of q1 for us so you're raising another 800k on the 700 you already raised on the 7 million cap that's right i got it okay cool uh good um and then how many customers have you signed up so in terms of you know conference venues you're leasing two or office spaces et cetera yeah so we are actually uh we have signed three convention centers and one shopping mall chain it's a chain basically they're starting with one of the properties in san francisco and they want to expand of course nationwide with us if this pilot and they're all paying at 12.50 a month they have one part we have uh so i sorry i could not cover the second part of the deal so some of them actually so two of them are paying us lease and two of them are actually revenue share deals so pure revenue share where we invest and we take 75 percent of the revenue so what do you think you'll make when you add that up what do you think you'll make per customer per month we will make per customer per pod easy three to four thousand dollars for zen space three thousand dollars per per pod per month is what our so how many pods across the four customers uh 30 pods okay so you're i so you can you think you're gonna make three thousand bucks a month per pod that's right okay but you haven't done that yet this is all historical projections in the next six even rental data that we have that how much event organizers are willing to pay at convention center even if they pay half of the fifteen hundred dollars per day is what i uh will be charged today we will charge seven hundred dollars to eight hundred dollars per day to even rental customers we will actually also have uh you know hourly usage uh when events are not renting it and we have third revenue stream which is through advertising on the side when did you launch the company what year uh 2017. so june 2017 is when i got the idea and november of 2017 is when we incorporated and what is the advertising cost uh right now we are spending uh i mean we actually will start spending uh in advertising actually by the way right now is one on one sales we actually have sales my question was you said you're going to make money off advertising what does it cost if someone wants to pay to advertise oh okay we have not established that so we have only established hourly usage and daily rental at this point in time and when we establish the pods in the location then we will start working on the advertising you put if you put one of my magazines yes okay and one of my books which is a washer journal bestseller so you know it's good in every pod yes i'll pay you something for that okay so i can actually uh well that actually is exciting so i have a customer here signed up on the show i guess we'll see it's got to be a good deal though you know i'm a tough negotiator yeah well that i can tell so you know all right my uncle's i'm serious i love testing new kind of forms of advertising like this and i like that it's kind of a dedicated you have their attention in the spot we'd have to figure out like if they take the book and magazine which i'd want them to do how you actually replenish that supplies so there's a supply chain question i i strongly believe at some point as we start expanding in 2020 advertising revenue will uh will overtake everything else that we have i don't know about that you have to get a lot of distribution i mean you'd have to get thousands of pods up i think well you know the fact of the matter is uh it's about the density of people at a location so if you go to a consumer electronic show or an airport or a event like that i mean if you just are able to show your logo to 200 000 people at once uh by having um you know in the middle of uh very busy locations so the value of how many uh again i'm not an advertising expert but you know busy locations can bring sorry i would just tell you i think you're i think you're discrediting yourself right you're using an old model of advertising which many people hate which is slap logos up everywhere you're actually owning a four foot by four foot four seat experience and i think you should price advertising around that you should invent a new model not rely on old ones around old online models that is a cpm basis absolutely so by the way uh is it four feet by four whatever it is i'm making that up all right let's wrap up with the famous five number one what's your favorite business book uh oh well i don't read a lot of business books but i know a book called alchemist which my father gave me which is which i keep all the time i read that once in a while number two what's this is there ceo you're following are studying um well elon musk number three what's your favorite online tool for building your company favorite sales force number four how many hours of sleep are you getting every night [Music] if i lucky if i'm lucky maybe four or four and a half okay and which situation married single kids uh married with a six-year-old okay one kid oh and how are you one kid son uh six-year-old no no how old are you oh i am uh 37 last question what do you wish your 20 year old self knew um do what a heart tells you to do if you believe in it just go for it i mean don't hold back but of course you know know your numbers learn from nathan zen space.io little posit conferences you can rent out they did about 100 000 in revenue last year already doing 250 000 per year closed this year hoping in a million by the end of the year by putting 30 pods out across four customers making money by either leasing the pods monthly at 1200 bucks per month to these locations or doing a rev share for people that swipe their card to use the space on an hourly or minute by minute basis their burning call at 45 000 per month that's gross burn not net that's what's total expenses they've raised 700 grand raising another 800 grand right now on the same note a 7 million cap team of 14 as they look to scale my aunt thanks for taking us to the top thank you so much nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're 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