How Bennudata Is Building Automated Cloud Disaster Recovery on $400K in Funding (Interview with CEO Pavel Danilov)

Introduction and Bennudata Overview

Nathan Latka

00:00Pablo is building venue data. They have three pilot customers currently in the Berkeley batch, which invested $200,000 for a 7% stake. They raised $400,000 in their seed round. The company helps with automated cloud discovery backup platform. He learned a lot at his first company, Bridge No More, scaled it from 0 to $40,000,000 of revenue, but then ended up having unprofitable sort of lines of business. Ultimately, couldn't keep up and had to sort of shut that company

00:21down, learned how to liquidate, which was painful, but good lessons to learn. We're obviously rooting for him rooting for him here. Hey, folks. My guest today is Pawel Danilov. He before cofounding Ben Udata in November 2022, he's cofounder and CEO of Fridge No More, an ultrafast grocery delivery company. They scaled that from zero to 40,000,000 of revenue, 30 dark stores, eighty five zero customers in New York and Boston from 2020 to 2022. Before that, he worked

00:45in an investment banking for eight years, and we're excited to have him on today. Pablo, you ready to take us to the top?

Pavel Danilov

00:50>> Yeah. Thank you for having me.

Lessons from Fridge No More and the Dark Store Model

Nathan Latka

00:52You bet. I have to talk about the ghost kitchen stuff because we had I had many people on, many people on in 2021, 2022. Alex Kantor at Ordermark is one that rings a bell. These guys were crushing it. And then all of a sudden, ghost kitchen just went off a cliff, and, you know you know, Alex basically shut the company down. What happened at your company? Did you see any of these patterns?

Pavel Danilov

01:14>> So my business was not the technically speaking, Ghost Kitchen. It was a dark store, so we were selling groceries. And but I think the trend is similar. The market is well, the economics is very hard. The very operational business and a lot of costs. And the main problem is courier courier related costs. So you pay them per hour, and it's very high. So basically, it's really hard to get to the breakeven.

01:45>> And every time you start a new new new store, it's a new market, you start from zero, you need to reach this breakeven. So you you grow fast, you end up with a bunch of stores making losses, and only a few stores already profitable. So it's hard to deal with that without, you know, extra capital injection. And in '21, you know, beginning '22, it changed.

Nathan Latka

02:06So how much did you guys raise raise at Frigid No More?

Pavel Danilov

02:09>> We raised around 35,000,000.

Nathan Latka

02:1235,000,000? Yeah. Okay. And what hap you guys shut it down, flash sale, big exit?

Pavel Danilov

02:19>> No big exit. We negotiated exit. We had a conversation with a few potential investors, but then at last minute, they walked. Mhmm. So that's what that's what happened.

Nathan Latka

02:36So bay you didn't make any money on it. You just sort of shut it down?

Pavel Danilov

02:39>> Basically, we shut it down. Yeah. Yeah.

Nathan Latka

02:41Okay. Well, thanks for the trans thanks for the transparent people need to realize it's part of being an entrepreneur. You know? You gotta swing the bat. Sometimes it doesn't work out.

Pavel Danilov

02:47>> Yeah. It's not just like we shut down. We we we shut down, and then I worked for almost a year on liquidation. And

Nathan Latka

02:54On what? Oh, liquidation.

Pavel Danilov

02:55>> Liquidation. Yeah. And and I paid all the salaries, all the taxes, but then I I need to negotiate to all the suppliers and real estate. So it was it was quite a cumbersome process. Yep. Not just like the base value you walk to another business.

Nathan Latka

03:11So did you was there something that you were exposed to at Fridge No More that enabled you to come up with this idea for Benue Data? Are they connected in any way?

Shutting Down Fridge No More and Liquidation Process

Pavel Danilov

03:20>> They are only connected through one of my investors. So one of my angel investors introduced me to Dmitry Empower, my cofounders, and Ben Data. And that's how we met. And I I realized that I still I have a scar from the human human intensive business with, like, all a lot of employees. So I wanted to build something which doesn't have a lot of employees, just software and b to b.

Nathan Latka

03:51There's two of you, two cofounders?

Pavel Danilov

03:54>> Then they had three cofounders.

Nathan Latka

03:56Three of you guys. Did you just split equity evenly at the start? Yep. Okay. Good. So you were very diplomatic?

Pavel Danilov

04:03>> Yeah.

What Bennudata Does: Automated Cloud Disaster Recovery

Nathan Latka

04:04Alright. What's the company do?

Pavel Danilov

04:07>> So we are building automation for disaster recovery process in the cloud. So the thing is the the backup is a huge business. Right? How you back up your servers, your cloud resources, and it's it's automated. But with the recovery, how you actually bring this backup back back to life, back online is very manual still. And we found this opportunity that in the cloud, all the cloud platforms provided all the necessary blocks, the cloud API, native backup.

04:46>> Basically, now we are able to automate that. We collect data from through API. We create those plans, and we can bring this, like, end to end automation for for recovery. So what it means when a disaster happens, I think ops or whoever is responsible needs to push this one button and the whole infrastructure, like applications will be recovered in a different environment.

From Fridge No More to Bennudata: The Connection

Nathan Latka

05:12Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founder Path. Check this out. I'll show you how you can access this in a second, but you log in, you

05:35connect your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founder Path dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company,

05:59you're gonna get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is

06:21this is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple.

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07:08second, but if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump

Pre-Revenue Status and Path to First Paying Customers

Nathan Latka

07:35back into the interview. You told me before the show your your pre revenue today, which which is great. When do you think you'll have your first paying customer? What's your plan?

Pavel Danilov

07:42>> So our plan to launch to release our first product by the year end. And in q one, we will start acquiring customers, hope to acquire three to five in in q one.

Pricing Strategy: Startups and Enterprise Segments

Nathan Latka

07:57How will you price it? I mean, is this the enterprise motion? Is it low ARPU, freemium, PLG model?

Pavel Danilov

08:03>> I think we're gonna we we actually have both. So we we will be selling

08:10>> kind of inexpensive product to late stage startups through AWS Marketplace. So without extra, you know, integration, sales, whatever, you know, process.

Nathan Latka

08:22How much would that be?

Pavel Danilov

08:24>> It would be 500 to 1,000 per month.

Nathan Latka

08:27Okay.

Pavel Danilov

08:28>> And that's that's to create disaster recovery plans and update them regularly. So have that ready in case something happens some disaster happens. For midsize enterprise, we define it as our second segment. That's more of 3,000 a month, 3,000 to 5,000 depending on the size of infrastructure, and that's that's going to be more of a.

08:54>> Manager's provider channel or direct direct channel.

Berkeley SkyDeck Accelerator: Terms and Network

Nathan Latka

08:58Understood. So so you're an accelerator now. Which accelerator did you choose to go into?

Pavel Danilov

09:04>> Yeah. So we picked Berkeley Skydeck at UC UC Berkeley. Yep. It's very focused on b two b and has a

Nathan Latka

09:14What's their model? Do they how much capital they give you? What equity do they take?

Pavel Danilov

09:19>> They invest 200,000, and they want to get something around 7%.

Nathan Latka

09:25Okay.

Pavel Danilov

09:26>> So it's similar to others.

Nathan Latka

09:29Okay. Got it. So you're you're in it. You're in the accelerator now. You said you've got a couple pilots working. Tell me to the degree that you can. I mean, what what are these pilots? Is it sort of very high touch with enterprises one on pilot deals?

Three Pilot Customers and the Consulting-Led Approach

Pavel Danilov

09:43>> So, yeah, so we are working actually, with Berkeley, we're working with the network of alarms, of Berkeley's headache alarms. We are budget 17, so there have been 16 budget before us, later stage. And we have currently three pilots with late stage startups. They are easier to negotiate with. Those customers, they start sending to enterprise, and they get requests from enterprise to build the disaster recovery process, which they don't have at the moment or they have a

10:13>> very simplified one. So, of course, they are saying: Okay, you want to sell to this enterprise, we will help you to build that process and you don't need three engineers and twelve months to actually to sit down and build that like custom solution in house. We'll just build for you the the process and it's easier. We also talk talk to midsize enterprise but that's that's a longer conversation.

Nathan Latka

10:37But why aren't these paid pilots? Why couldn't you get people to pay up front for these?

Pavel Danilov

10:44>> I think people are not familiar with with with with the product. So we still actually, we're in parallel building the product. So we kind of currently in the in the mode of, like, half automation, half consulting. Right? So you build it you build it as we as you, like, as we do the pilot. So by q one, we will have our first product released, and then then we can start selling.

Nathan Latka

11:13That's great. That makes lots of sense. How much of the $200,000 have you guys already spent building the MVP?

How the $400K Has Been Spent

Pavel Danilov

11:20>> We we actually raised 400 already, so through through angels, and we spent 150 so far. So we have

Nathan Latka

11:28And is

Pavel Danilov

11:29>> in in the bank.

Nathan Latka

11:30Is that mainly on sort of salaries and stuff?

Pavel Danilov

11:33>> Yeah. Mostly, it's in engineers, engineering team building the product and some tests on, you know, marketing tests.

Marketing Tests and Early Customer Acquisition Channels

Nathan Latka

11:42Yeah. What marketing tests have you run? How do you think you're gonna get your first 100 customers?

Pavel Danilov

11:47>> So we run some online marketing tests. We,

11:52>> you know, used LinkedIn and Google. It's it's not very effective so far. So at the moment, we are relying on direct channels, basically emailing to Berkeley network, Skydeck network, advisers, and alarms, and it's been pretty pretty effective so far.

Famous Five: Books, Tools, and Personal Life

Nathan Latka

12:16Very cool. Well, we're we're rooting for you. We hope the pilot launch goes well, and thanks for teasing us a little bit here with what to expect in January when you guys launch officially. In the meantime, though, let's wrap up here with the famous five. Number one, what's your favorite business book?

Pavel Danilov

12:30>> Favorite business book, hard things about hard things.

Nathan Latka

12:34Number two, is there a CEO you're following or studying?

Pavel Danilov

12:38>> No.

Nathan Latka

12:39Number three, what's your favorite online tool for building a business?

Pavel Danilov

12:45>> I like Softer, the the website builder.

Nathan Latka

12:49What is it?

Pavel Danilov

12:50>> Softer. Softer.

Nathan Latka

12:51Number four, how many hours of sleep do you get every night?

Pavel Danilov

12:56>> Eight.

Nathan Latka

12:57And situation, Pablo? Are you married, single, kids?

Pavel Danilov

13:01>> I'm married to kids. Clay is my actually, birthday my my oldest daughter birthday, she's 13.

Nathan Latka

13:09Oh, that's amazing. How old are you?

Pavel Danilov

13:12>> I'm 41.

13:14>> 41.

Nathan Latka

13:15Last question. What's something you wish you knew when you were 20 years old?

Pavel Danilov

13:22>> 20 years old. I think I I wish I knew that tech was going to that big. Mhmm. And I and I, you know, jumped into that earlier than I did.

Closing Summary and Wrap-Up

Nathan Latka

13:34Guys, pop Pablo is building Benue data. They have three pilot customers currently in the Berkeley batch, invested which $200,000 for a 7% stake. They raised $400,000 in their seed round. The company helps with automated cloud discovery backup platform. He learned a lot at his first company, Fridge No More, scaled it from 0 to $40,000,000 of revenue, then but ended up having unprofitable sort of lines of business. Ultimately, couldn't keep up and had to sort of shut

13:57that company down, learned how to liquidate, which was painful, but good lessons to learn. We're obviously rooting for him rooting for him here with Benny Data. Pablo, thanks for taking us to the top.

Pavel Danilov

14:06>> Nathan, thank you.

Nathan Latka

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