How Zestful CEO Mat Vogels grew to $979.4K revenue and 52 customers in 2024.

hello everybody my guest today is matt vogels he was born in colorado but lived in four countries and moved 18 times by the team at the time he was 18 he's a lover of all things startups and side projects movie nerd and passionate about the future of work with his current company zestful matt you ready to take us to the top i am how you doing i am doing well thanks for coming on so break down the company for us what are you guys focused on and what's your revenue model how do you make money yeah so zestful what we're trying to do is change the way that companies particularly smaller companies offer employee perks and rewards and the way that we do that is with what we call our zestful perk card it looks and works like a regular debit card except companies can control what specific budgets and what those budgets can be spent on directly in the app so common example would be giving an employee 50 a month that they could only use on fitness and health they use the card like any other debit card at their favorite gym or online fitness class it goes through without the reimbursement process or the headache and the way that we make money the business model is just five dollars per person per month there's no fees additional fees long-term commitments or anything like that and on average what's the team size when a company signs up with you what are they signing up for that's been kind of the most fun about this whole thing we have companies that are five ten employees in fact we had a barber shop sign up yesterday which i think was awesome but at the same time we have companies that are a thousand employees with uh employees that are all over the world be it in the united states but also in europe so it's a very very broad range if i had to say on average we see typically companies around 100 employees okay so about 500 bucks a month or six grand a year is typically yeah very good okay and put this on timeline for me when you launch we kind of long story short we originally launched the idea for zestful two years ago the idea that we wanted to change the way that we do employee perks we set off into the market and thought how the hell do we do this the first idea was we needed to make partnerships and relationships with these companies like a spotify or a netflix turned out to be really really hard so we pivoted into doing team activities and employee outings so think happy hour bowling that type of thing did that for a year didn't really work out didn't enjoy it didn't love it ultimately found our way back to this idea which was those individual employee perks the technology finally allowed us with the debit card and ultimately partnerships with visa to really build what we were doing right now and that was in the summer of 2018 when we started and then ultimately just launched the product at the end of january so we kind of think of february 1st is our first go to market launch for zestful and how many companies have you scaled to over the past couple months yeah we're over 50. i think i checked right before this call where like 52 companies that's great okay so 52 companies average kind of 500 bucks a month cause i got 100 users that puts you out like 20 25 grand a month right now in revenue uh it depends i think most of those companies on where look at the average is probably closer to 100 a month if i'm looking at it okay um if only because at least for discounts and things that we offer up front especially for larger companies that are coming in uh we tend to do that got it so more like maybe five grand a month something like that yep okay and what's your team look like today how many folks yeah we're a team of five and one intern so five and a half okay so my obvious question is kind of how are you paying the bills right revenue's not covering it so how are you paying the bills yeah we raised uh a smaller round at the end of last year it was uh something that actually came together very spontaneously we were able to close the round in 30 days uh before that kind of all of last year i was literally doing 40 to 50 hours a week of freelance i do a lot of web design and web development allowed me to pay my own bills and also pay a couple engineers that are now full time to basically build out the entire prototype and then really going into thanksgiving last year finally had some money in the bank to pay our salaries and we're projecting now ultimately to be profitable within uh i think three or four months now so we're really excited to see what that holds what does burn look like today how far in the right are you yeah we're about 45 maybe 50 depending on marketing spend a month yep but the coolest part that we've seen and i think one of the biggest things that i talk to with other folks that are selling b2b our pipeline as far as customers that are already quote unquote signed up but are just yet to roll out is closer to 10 000 cards so we have over 10 000 users that have already signed up for zestful right now but ultimately they're rolling out at the beginning of q2 q3 uh scattered about depending on their budgets throughout the year so already we can at least project forward these contracts or deals that are easily going to get us to that profitability mark yep and then so how much did you actually raise early on a million one million okay and was that a convertible note or equity no it's all actually safe it's not a proper way to say it yeah yeah that's good okay on a save and then no revenue 2018 right you really just sort of turned that on this year no revenue we've made actually more revenue last year than we had so far it's only because all of my freelance income came in as like zestful inc which was great yeah but excluding that no no product revenue and too early yet really to tell you know numbers around like churn and expansion things like that right yep yes but the cool part is is that we've learned in this space is that if you can get really over 20 to 25 engagement rate which for some perk programs or reward programs is actually phenomenal and what we're seeing so far is over 90 percent of people that are using zestful today are using it every single month so granted it's only been a few months but those companies and employees that have been using it are already using it every month in many cases almost every day because they're using it on things like their spotify netflix coffee shops you name it so what we're looking at is hopefully far lower average of churn compared to other perk and reward programs if only because we finally think that we've built something that employees will really enjoy using so if i'm inside of a company that pays you zestful they're gonna give me one they're gonna say nathan as a perk we wanna pay for your spotify account here's one credit card to put that on okay next month now we wanna pay for all your lunches they're gonna give me a different credit card for all my lunches can't i end up with like 20 credit cards nope it's all in one card so when you log into the app or go onto your site it's still that one card you can stack as many of these different allowances or rules as you'd like so on one card you can say hey nathan we're gonna give you 20 bucks a month to spend on your spotify netflix those type of things we're also going to give you 50 bucks a month that you can now spend on meals every week whatever you want to do and those can be put onto the same card and controlled separately how do you know when i scan my card for like spotify or like meals how do you auto categorize and pass that data from the credit card i guess machine reader or whatever into your back-end system that's really the secret sauce of what we've built so from the ground up what we're doing is building a unique catalog of products where every time somebody swipes their card we're uniquely qualifying or classifying that product with its own unique id in our system so that as soon as somebody uses spotify we then capture that merchant data we tokenize it using our own process so that the next time that somebody uses it we can guarantee without a doubt that it is spotify and that way we can put it into these different categories like entertainment yeah um so like there's a lot of these companies popping right now like brexit is obvious we just have those guys on the show right so like how do you compare yourself to brex yeah i think what the biggest difference is we look at all these other companies like abrex they're focused more on a top down meaning that they're giving it to their executives they're giving it some more of like business expenses you're going on corporate travel what we're trying to do is go bottoms up where employees are going to be using this on the things that they don't necessarily use for work mostly using it on things like their spotify netflix things outside of the office to improve their quality of life and i think so far that's been the biggest differentiator because at the end of the day what i truly believe is if your employees aren't happy even if you have all the bells and whistles and you build all the features for the admins and the ceo and the founders at the end of the day at the end of maybe those 12 months when you've been using it if you don't have that high engagement rate because it wasn't built for those employees what's ended up happening is they're going to cancel and churn away just because at the end of the day employees make that decision and that's who we're building this product for very good makes sense let's uh let's wrap up here with the famous five number one what's your favorite business book oh i'm gonna say the hard thing about hard things number two is there a ceo you're following or studying uh vlad magdalen he's the ceo of a company called webflow which was a company that i started out as my startup career and definitely look up to him in the way that he's done things yeah they're great they came on the show a couple weeks ago doing great thinking about buying out their earlier investors actually using venture debt we'll see if he does it there you go number three what's your favorite online tool for building your company ooh notion um we use notion and rely on notion almost exclusively for everything from bug tracking to notes to contents to i mean almost everything we go through notion that or slack maybe a close tie number four how many hours i sleep to get every night um so as of two weeks ago i was really really good at getting eight to nine hours of sleep but i had a baby 10 days ago oh wow so now it's probably closer to an hour maybe two hours if i'm lucky hoping that that changes here pretty soon well i mean you can't obviously survive on an hour of sleep you're kind of up and then asleep and then up and then asleep in like hour chunks right basically but i mean over the last couple nights i've been tracking my sleep i've gotten literally maybe two to three hours of sleep tonight for the past five nights in a row that is insane uh i don't know that i would ever want to have babies because i don't like giving up my sleep um and what's your so what obviously it sounds like married in one kiddo married one kid oh yeah okay and how old are you 30. last question what do you wish your 20 year old self knew um that's a really good one i think to not necessarily worry too much about how things are going to play out i think especially in your 20s everybody always says it give yourself time in your 20s to take some of those risks and not necessarily push things off but certainly give yourself a little bit more freedom and flexibility to try those new things and explore new things because i do think especially me going into this part of my life right now i think that it becomes less and less likely that you're going to have the opportunity to do those things yeah guys there you have it zestful he just had his first baby he's burning 45 000 a month right now in in revenue raised a million bucks team of six making it easy for brands and companies to give and incentivize their employees with things like you know spotify you know covering their spotify spend or their gym memberships or things like that with these individual credit cards they have over a 90 activation and usage rate every month serving about 52 customers right now at 100 a pop so doing about 5 200 a month right now in revenue hoping to get back to break even in the next three or four months matt thanks for taking us to the top thank you so much