How Zest CEO Yam Regev grew to $3K revenue and 42 customers in 2019.

hello everyone my guest today is yam regev he is has 10 plus years of experience in scaling and managing b2b and bdc organizations the former cmo of webidoo which raised 17 million bucks and 80 employees at its peak he's founded and managed compass a large web marketing agency with 11 years of successful operation and now building zest.is knowledge building platform for professionals yummy you're ready to take us to the top yeah let's do it all right so help us understand what maybe what the company does and give us a customer example yeah sure so zest is a knowledge building platform and actually we unify community content curation with ai to create the best professional knowledge path for each individual user so that way we can build their knowledge you know without any kind of noise um and each individual can just increase his professional knowledge over there um users are the mainly marketers at this point we cater mostly for the marketing vertical so people can just come in sign up being on-boarded by defining their own preferences and then they will get the most accurate content they should consume in order to become better professionals they don't need to go to facebook google or any other kind of places um and thus be swamped by content so this is the place for professionals to grow is sean ellis an investor no very good you just like him a lot oh yeah he's he's on your all over your website so i figured it was one of the two all right what's your business model how do you make money so we're in free revenue kind of status at this moment but then the model that we'll use is subscription based so it will be six dollars per month we just launched a mobile app uh last week we were number one on product and another screen product of a product of the week over there uh we generated some six thousand uh better users that will come and help us to you know create a better product market fit kind of procedure all in all for zest we live for the past we launched sorry for the past in in two years ago we have more than 100 000 users and more than 32 000 monthly active users okay 100k active what is an active user sorry what does 100 000 users mean right so um the main product or the main destination until now was um youtube extension so each time you can install it and then each time that you open a new tab zest will be there so it's like a feed that gets and no get to know you and then building your knowledge accordingly so over there we had the more than 1000 installs um and for active users those are people who opened though the chrome new tab extension and minimum that they did over there is chrome and of course click on articles save articles share articles and everything that you like to consume consuming content so these are active users okay so so how many active users again 32 000 monthly active users okay 32 000 monthly active users and then the 6 000 you signed up last week on product hunt are those kind of new installs or active users what do you consider those people right so those people came in there in the past two months as we created um a pretty bad kind of a campaign and over there we ask people to um to register with the closed beta version for the mobile app that we just launched last week on on product uh we created a viral loop over there so people who registered uh get the chance to sell send the lead to a few more colleagues of them uh the product is free forever for them for those power users that will sign up and those you know just from this campaign where we got um 6 000 registrations we already onboarded 2.5 k and all in all we have 3 000 monthly active users just from this small beta launch so 3 000 monthly activity on the on the mobile app okay okay 3k made um act and now how do you define active on the mobile app so at the moment it's just people who have opened the the app and they at least they scroll a little bit so it's not just like so yeah i'm not not a huge barrier or entry to get someone to go from install to user uh but but this is by the way this is i mean the tricky thing i think with what you're building is it's almost like an entrepreneur.com it's a media organization but you have hardcore tech i'd say more tech than entrepreneur magazine probably has behind it i mean so do you do your just view yourself as a business model that should look more like a kind of a b2b sas company or like a b2c you know you know news aggregation app like an rss feed that's a great question so i'll tell you that um i don't think that b2b or b2c is something that is in our core dna definition at the moment i see it mostly go to strategy go to market strategy point of view and it means that um in most places right now when professionals want to build their knowledge they either you know freelancers or they work in some product based companies or agencies so what we want to do is to get to those professionals as we do today and they will get to us they will um spread the word within the departments that they walk in and then we'll get more and more users this is how we go till till now so we we see this model as bottom up right so we get we if you want to call it in a different name it will be business to professional um and then they will get us into those companies and then of course you know if you want to increase and to upgrade everyone else so we can speak with whatever the cmo just create a seat based kind of model so that's a landed explain kind of methodology okay so of the 6000 you've had no pricing kind of to date except now you're charging six dollars per month on the mobile app six thousand have installed it via the product launch 3000 have now activated defined by they logged in and scrolled a little bit how many of them have converted a paid what's that again have any of them converted to paid oh we have um a few dozens of them but nothing really you know we just launched it no no but what's the number this is a great moment you're turning like 36 ish oh we have around the 42 last time that i uh checked i love yama by the way i love this moment because this is the stage where like you're refreshing every like two hours to see to see like okay 43 44 45 you know all use all concurrent users and all that well the geographic they're coming through i'm just addicted you know you cannot you cannot stop do do the refreshment over there what are you learning i mean what are you learning so 42 people paying six bucks a month is 72 dollars per month you're just now kicking us into a high year what are you learning from these first 42 signups i'm getting there first of all we're um connecting them manually with each one of them just to make sure that we know them who they are what is the jargon that they use what is their lingo what they expect from that was it by mistake or not uh we created in zest because we have a community-based kind of product so we have a big uab which is a user advisory board we have 64 people over there from from the chrome extension days that we had so people are really involved with how things have been modified at zest and our content is being approved um so we really love to be without any kind of automation and do things that don't scale so i know it's a huge cliche but this is how we build zest and this is how we are achieving product market fit we just understood that those professionals want to feel the warmth of our hands on their shoulders not in a creepy way but they just want to understand that there is there are people behind the product that you want to listen to they want to be part of the whole movement that you're creating is the chrome extension dead with all the new rules google has released around the approvals and paying third-party you know parties to validate these apps um not at all um and you know it's a huge real estate there is only one new tab extension that the user can have right it's not like a mobile app that you can have multiple apps you have only one over there so that's a huge real estate for someone like us that want to not just to know what is good content or knowledge as we call it but also how professionals are interacting with the knowledge so to be on your chrome or your browser teach us a lot how you consume your content how much how deep you scroll where you're highlighting and all that there are a lot of benefits for that on the other end a lot of disadvantages because a lot of early users can say that it's too intrusive uh for instance so this is why i believe that we got more than 100 000 installs and again we just cater for the marketing vertical and that we have some 32 percent who became monthly after do you actually have the hundred thousand installs the emails so you can remarket to them or no what's that again the hundred thousand people that have installed the chrome extension do you have their emails so you can remarket to them and reach out personally to try and onboard them or no no but if you um want to suggest content on this so other community members can consume it or it will go through the distillation process or if you want to follow save and whatever whatever other kind of action you need to connect with um either linkedin or some other social network account and i and for these we have i think around 60 2000 um emails you can say all in all do you so let me ask you a question today when you wake up the number one piece of like zest content that everyone that the most amount of your users are seeing on their homepage when they open up chrome how many clicks will you typically drive to one of these pieces of content in a day um a few thousands of clicks for each article and uh the chrome extension and i know it's not a big um thing but the chrome extension has been opened a few millions of times each day of course it's your new tab extension right so each time you open a new tab it will be there but um just to know that we have this kind of reach and you know if you if we start to speak about um um and stuff like that so our end users have potentially i outpu those are professional marketers we can see that more than 60 of them who are connected with the linkedin they're marketing seniors so they're head of departments and cmos and vps so i think that our user base is quite in high quality interesting um how many unique impressions does the chrome extension get per day um so that's about a few million so it opens a few millions of times so we call impression of views um in this case but unique i imagine one user could open it i mean i open my chrome browser probably 30 times a day yeah we have the um the average opens are 13.2 for each user so you just need to divide i can't remember the the thing but it's probably 7 million divided by 13.2 so i mean you think it's like more than like more than a million unique opens per day that's what we see right now yeah because you have the multiple devices and also yes so how do you get more than a million unique opens per day but you only have a 100 000 unique installs of the chrome extension what is it again how can you have a million unique opens per day but you only have a hundred thousand total unique downloads of the chrome extension ten times less right so we need to see how we count what is the threshold over there and we know that people are walking from different kind of and we have like the same account but from different kind of places so let's say that someone walks from his desktop and it also walks from a then you take it to the mobile and then we have it for other for his um home a workstation so that's something we cannot um good enough if you can if you got it but i mean so when you're actually measuring human bodies right that engage with you once per day it's got to be less than 100 000 because that's the total amount that i've installed your app over life right yeah so that will be probably from different devices so that's probably what we have this gap okay but that would be like again let's say all 100 000 open at once per day that would which would be very rare they'd have to open on 10 different devices for you to get over a million unique opens per day i don't have 10 unique devices that's true that's true is there just a number calculation here off something's off probably maybe in this specific parameter so yes yeah you need to oh yeah that's okay um okay very cool so launch the mobile app uh it's doing well uh what the product on launch uh you got a thousand upvotes that drove how many clicks back to your website um i think it's around this more than 3k all in all the visitors okay i thought you said you got 6 000 new beta users from the product on launch so how do you get 6000 new beta users but only 3 000 clicks six thousand from the previous uh two months campaign that we did pre-bus or pre before the launch this is how we created all a viral loop that i explained before so uh we pre-launched or we had a pre-launch campaign for two months then we gained those um better better helpers they've been signed up so let's just quick go down the product hunt funnel you get a thousand up votes that drove three thousand clicks back to your site how many signed up or downloaded the app um i'm not sure if i remember all the all the details over there but i think we had a few uh probably 1 300 something like that and new mobile mobile installs yeah got it interesting okay so i mean how are you gonna get to your first thousand customers signed up at six dollars a month are we going to get to it yeah what do you think the path is going to be um i believe that it will be by um um we see it you know as a retention-based kind of a model so with everything that relate to provide more um added value for the users themselves so it will not be just another as you said um place where you come and consume a media stuff um it should get a lot of added value should provide a lot of added value for each end user and um by we're doing it by getting the best amount best match score for each content that are getting published on zest so we know how to match it with each end user so we know that by generating a lot of added value and they're a lot of quite nice quite yeah has anyone started paying and stopped the six dollars per month not yet because the the you know the um the payment option was just open last wednesday no i know i just i'm curious if anyone signed up between now and then and then canceled that quickly as well yeah but i i thought we'd start to see churns probably in a few days yeah i think you're going to see churn through the roof on this thing and i'm curious how you're going to try and suppress it and keep it down but you know that you'll keep that down by the strength of the recommendation engine if you have truly have content curated for every viewer they'll keep paying so we'll see how that works out what's your team today how many people we have two co-founders and we have a team of three people that all of them were users who became volunteers three in total yeah that's it including including you two no no we have four five well five in total so two co-founders um and then three team members how so how are you guys surviving how are you paying yourself over the past two years so we bootstrapped the company for one and a half years almost we launched in march 2017. it was on product and as well um and then we saw some nice traction and growth i think that we reached almost 40 000 users back then when we started our pre-seed round and then we uh we pre we fund raised 700 thousand dollars as a precedent it was last august uh benedict is quite low with around 34 000 a month at this moment so we can uh we have uh your your burn is 34 000 a month yep okay and how much total have you raised uh 700 000 oh that's all okay 700. yeah and how much cash do you have left in the bank so we have runway for another 11 months oh okay so you have plenty of time yeah you know for the founders or ceo i cannot feel it because i know that we need to find ways where we can and not when we need of course um but we do have we're starting now to do um states and um i believe that the sibling will be open in the in september because we left some money on the table and on the floor sorry from the previous run from good investors that we definitely want the one that's good but just because this is your first revenue 12 months ago yeah no revenue right yeah very good all right let's wrap up well actually when you do your seat around later this year how much do you think you'll raise um it will be around two to three million dollars only known i believe the cap will be around five million um it's still negotiable of course but this is what we aim to okay and that you think you're just in q4 this year um yeah definitely very best how many paid customers do you want to get to before you go out and try and raise um so that's a good question because the technology is so deep and the vision is relatively big as we see there is you know just for example if there is spotify for music so there will be zest for professional knowledge um so this is why revenues are not the top kpis at this very moment i believe that to see a good quote of around the 35 after week eight that will be our core kpi and we want to get for at least 45 000 monthly active users in the mobile app alone uh so these so you're focused on getting 45 000 monthly active users by q4 before you raised yeah this is what we want to do i believe to be doing the during the race right it'd be probably of the 45 000 monthly active users you want by the time they hit eight weeks old do you think 30 will convert to paid um i believe that um if we get to the one to two percent at this stage uh will be it will be good enough that's for sure in what period of time though so you sign up a new monthly active user or what period of time if we sign up what let's say a hundred monthly users sign up today and you're gonna convert one to two percent of them to paid but over what period of time the first day the first seven days the first seven months seven days with 14 days of a trial after we did say it will be free forever but not the premium version of course so they will have 14 days to convert so we need to use some drip and nurturing and all these kind of methodologies and they say i assume that we will gather very good let's wrap up here with the famous five number one what's your favorite business book i can't read books i'm totally dyslexic this is why i created number two is there a ceo you're following or studying um yeah there is a good ceo for a company called ax flyer johnny um what's the company name apps flyer apps flyer yeah number three um israeli unicorn um i really love what they do um i follow what they what they do what these people do over there number three what's your favorite online tool for building your company 10 fingers number four how many hours of sleep to get every night um at least seven it really depends on my three daughters okay and so may are you married or single yeah i might marry them sweet sweets three kids and how old are you i'm 38 last question what do you wish your 20 year old self knew yeah what do you wish you knew um i would probably say that um i wouldn't i need i need to sacrifice myself only for my own stuff not for others yep make guys there you have it zest.is curated professional content they've got about 6 000 users that have downloaded their mobile app of which 3 000 are active they're now starting to convert those active customers into paid at six dollars a month according to currently 42 paid customers right at the beginning just around the paywall on about a week ago so doing about 100 bucks a month right now in revenue they look to scale burning about 34 000 per month with 11 months of runway in the bank hoping to raise a seed later this year called a two to three million dollar seed on maybe a 5 million cap all right yam thanks for taking us to the top thank you so much nothing 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 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