How WordLift Reached $1.6M ARR with 800 Customers and 38% Profit Margin (Interview with CEO Andrea Volpini)

Intro and Company Overview

Nathan Latka

00:00Guys, wordlift.io today does $195,000 a month in revenue up from $103,000 a month just a year ago. They helped large brands like Ray Ban quickly use AI to write meta descriptions for all their thousands of skews on all their sunglasses. They do that same thing across other brands using their knowledge graph, enabling you to build a real AI strategy and increase human productivity, launching all these descriptions within your own company's voice based off the data you

00:28feed wordlift.io. He's got 800 paying customers. He profited $70,000 last month. So really healthy profit margins. Last raise was $800,000 at 5.5 post. And we'll be looking to do his next round in Q4 this year, Q1 next year, targeting 4 to 5,000,000 at somewhere around a 20,000,000 valuation. Again, scaling nicely with a team of 27 engineers, five on the sales side. Hey folks, my guest today is Andrea Volpini. He's a serial entrepreneur and an expert in

00:57the semantic web technologies and artificial intelligence space. He's the co founder and CEO of wordlift, a company that specializes in AI driven SEO solutions. His experience and focus is on leveraging artificial intelligence to improve web content and enhance SEO and user experience. Andrea, are you ready to take us to top? Totally.

Andrea Volpini

01:16>> All right.

Nathan Latka

01:17Well, I'm thrilled to have you back on. You know, we had you on about a year ago. For those that have not heard of wordlift before, maybe describe how a customer is using you today and then we'll jump into more of the story.

How WordLift Builds Knowledge Graphs

Andrea Volpini

01:27>> Right. So we build knowledge graphs and these knowledge graph are designed to optimize content so that search engine can understand what this content is about, get more uses. And then we're starting to use this knowledge graph to use generative AI alongside with it. And that's, that's the exciting part.

Nathan Latka

01:46And so what does that mean? Can you maybe actually share a customer name that's using you and tell us how they're using this specifically?

Andrea Volpini

01:52>> Right. I mean, let's take Rayburn. Okay. They, they, they, they have product description and, they've been using for over a year now, wordlift to build a knowledge graph and then, fine tune a model that can create a product description for every single variant, not just the main model, but every single variant with the exact tone of voice that Ray Ban has. And, by doing that, they're getting significant amount of profit, and that means an increase of

02:20>> the revenue of around 25%.

Nathan Latka

02:22Are they specifically using new Ray Ban to update all the SKU data for all the different sun classes in terms of, like, the metadata description for each each frame?

Ray-Ban Case Study

Andrea Volpini

02:30>> That's correct. That's correct. And and we build an ontology to describe how does a sunglasses is made of, what is the purpose, and using this ontology, can we create better content. So better data equal better content. And we'd be fusing the knowledge graph alongside with the language model in order to provide better quality, better accuracy, better validation, prevent hallucination. And this has changed the business this year.

Nathan Latka

02:55Very cool. Now, you still last time you came on was about a year ago and you said you were charging on average $130 per month. Is that still about the average?

Enterprise Pricing and ARPU

Andrea Volpini

03:02>> No, really. I mean, we have refocused heavily on on the enterprise clients. I mean, today, wordlift is a is a enterprise SEO platform, and so we have a reduced number of clients and a and a higher ticket. Our average enterprise client, would have €5,300 average monthly subscription with us.

Nathan Latka

03:28Okay. So I guess how many last time you came on, you told me you had about eleven fifty paying customers. It sounds like you have less now, but they're paying more. How many customers today?

Customer Count and Revenue Figures

Andrea Volpini

03:39>> So we are around 800 clients. And, you know, just to give you a few numbers, last year, 2022, we closed at 1,200,000 Euro, you know, the the the final number. And, in June this year, we've done, 1.352. So we we we went beyond a 100% growth, in the first semesters, and now, you know, the numbers is kind of slightly going down, but we were targeting 2.3, 2,500,000 Euro by the end of the year.

Nathan Latka

04:12Okay. So $1,400,000 run rate is about 120,000 per month divided by 800 paying customers would mean each one's paying on average about $140 per month.

Andrea Volpini

04:24>> Yeah. Yeah. Yeah. But I mean, there is a, there is a slight difference between, you know, the, the enterprise batch and, everyone else. And we have onboarded clients of the size of Coca Cola, for example. And so we are working on multiple markets, multiple languages. Mhmm. And so, you know, the the the the way in which we're selling the subscription to the enterprise is that we sell by website, per market, per language. And so at the

Coca-Cola and URL-Based Subscription Model

Andrea Volpini

04:51>> end of the day, you buy wordlift on a URL basis. And, you know, starting point can be something like €2 per URL per year.

Nathan Latka

05:01Okay. Got it. So it's you sell per URL per language per year?

Andrea Volpini

05:05>> Kind of. And then we add on top, you know, smart content services, like the content generation, like the module for generating q and a. So we are effectively becoming a generative AI platform focusing on enterprises doing SEO, starting from the creation of a knowledge graph.

Nathan Latka

05:23Oh, 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

05:46your 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 Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

06:11get 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 this is

06:32not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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. Maybe you're

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07:46the interview. So 1,350,000 run rate today up from you told me a year ago. Again, you're about 1,200,000. So a little bit of growth. Now that'd be okay if you'd bootstrapped the company because when you bootstrapping and grow on your own terms, but you've raised a pre seed round in 2022. I think you raised 800 ks at 5,500,000 post money. How are those investors responding to, you know, what I would say is maybe slower growth, you

08:12know, relative to what their expectations were when they invested?

Andrea Volpini

08:15>> I mean, you called the 100% growth, a slow growth.

Nathan Latka

08:21I'm sorry. You told me that a year ago, I mean, you came on in 2021 as well, and you told me you had seven zero five paying customers at 123 a month, which would be 1,100,000 run rate. You told me then you grew that to a year ago to 1,200,000 run rate. And you then said this year, you're at $1,300,000 run rate.

Andrea Volpini

08:40>> In June.

Sponsor: Founderpath Valuation Tool

Andrea Volpini

08:43>> That would be 2.5 in December.

08:48>> Does it make sense?

Nathan Latka

08:50How much how much monthly recurring revenue did you do last month?

Andrea Volpini

08:53>> Yeah. So 195.

Nathan Latka

08:59I see. I see. Okay. Got it. So a year ago, you were at you were doing about

Andrea Volpini

09:02>> $1,103. Yeah, around the 100. So we

Nathan Latka

09:06I see, I see. So comparing September to September, you've gone from 103,000 per month to 195 per month. I see. Okay. And where did where did most of that growth come from? You know, you know, doing a lower ARPU high volume approach relative to landing a Coca Cola. It's a very different sales motion.

Andrea Volpini

09:23>> Yeah. Yeah. So so the and and the growth is coming primarily from, you know, helping this company generate content with high accuracy by leveraging on the knowledge graph. So the knowledge graph is the foundation. And then on top of that, we start generating content and validating content. And that has been, you know, kind of the pivot that we've done last year. I've been investing on transformers for for many years now. And the combination with with knowledge

09:49>> graph, it's it's it's bringing a lot of value.

Nathan Latka

09:52But Andrea, isn't the isn't the knowledge graph only as powerful as the dataset that you feed it in the sample size of that dataset? And isn't that directly I mean, if if if the customer that signs up for your tool doesn't have a large dataset to feed it, your knowledge graph is going to be really poor for that customer.

Andrea Volpini

10:06>> Right. I mean, of course we have built a lot of tooling for enriching this graph and improving whatever data you start from. I mean, for example, we now have the ability to ingest the Google Merchant feed directly into the Knowledge Graph, and then we can start enhancing, you know, this merchant feed and making it better because we upscale the images or we add additional metadata to the products, or we start to categorize product with a different

10:30>> taxonomy. So there is a lot of value that gets into the creation of the data inside the graph. I mean, it's not just the graph. Of course, the data that you bring in, it's the first asset, but we have to improve it because otherwise there's no SEO value. But once we improve it, then there's not just SEO value. You have something way more valuable, which is you're going to build your AI stack on top of it.

Nathan Latka

10:52I understand. How many folks are full time on the team today?

Team Size and Headcount Breakdown

Andrea Volpini

10:57>> So we have around 24 people between, you know, the the kind of the the resident one and and the people working remotely.

11:09>> We have around seven people in the tech.

11:14>> We have five sales. We have nine in the support integration team. And then we have, yeah, two two marketing and me.

Nathan Latka

11:26And so with that headcount expense, obviously, you know, you pay that out of your monthly recurring revenue. Is the company profitable today? Are you burning that money?

Profitability and Profit Margin

Andrea Volpini

11:33>> Yeah. No. We are profitable. We we have a good profit. We have around I mean, if we if I look at August, I think we are around 38 profit margin.

Nathan Latka

11:4838% or 38 thousand?

Andrea Volpini

11:50>> 38%.

Nathan Latka

11:52Okay. So 38% on 200 ks of MRR would mean you profited something like $70,000 in August.

Andrea Volpini

11:58>> Yeah. Yeah. It's true that of course we are keeping, I'm keeping my salary low, the other, you know, management. I mean, we're, we're, we're still kind of in a bootstrap mode. I mean, I haven't, I want to keep the company profitable so that I don't have to, you know, deal with the issues with investors. I mean, I want to keep things as healthy as possible and I, I want a company that is profitable. We've always been

Cash Position and Founder Salary

Andrea Volpini

12:18>> profitable since, you know, the, after the first year now. And I want to keep it that way.

Nathan Latka

12:22So does that mean you still have the full 800,000 pre seed from last year in your bank?

Andrea Volpini

12:27>> Pretty much. We have a, at the moment, I think, yeah, $7.80. I mean, it's been fluctuating. We're investing on it. On Monday, we have a new general manager starting up. I mean, so we were investing on technology and team as we should, but we are not overspending. We're not like rocking crazy with the money that we got.

Nathan Latka

12:44And you mentioned your own salary. A lot of founders are not quite sure what pay themselves. So when you say you pay yourself quote a low salary, can I ask what that is and how'd you come up with the number?

Andrea Volpini

12:55>> No, you're gonna ask. No, but I mean, let's say that if I would go and work on a corporate, I would possibly earn double of what I'm making. Kind of. I mean

Nathan Latka

13:11Yeah. But you own obviously, you I mean, are you sole founder? Do you own a 100% of the equity?

Andrea Volpini

13:16>> No, I mean, I have, I have another co founders when we're, we have a team. So, but of course I have capital, you know, I, I invest in my company. I'm happy. I'm not complaining about my salary. I mean, it's a balance that I'm choosing because I want to invest in the company. I want to see the value grow and I want to keep the value for investing in innovation.

Nathan Latka

13:35Yep. Did you split fifty fifty at the start?

Andrea Volpini

13:37>> Yeah, pretty much.

Nathan Latka

13:39Okay. Okay. And how, what, what employee stock option pool did you set up on the seat around? Do they own 20%?

Andrea Volpini

13:46>> So, so we have around 10% at the moment for that. And I'm planning, you know, if we do a new round, I'm planning to review this number and increase it and, you know, kind of make it more participation from, from everyone on it.

Nathan Latka

13:59Okay. So investors put an 800 at 5.5 post last year, which would be about 15% of the company. Employees own something like 10% and the rest, which is 75%, you and your co founder kind of split fiftyfifty.

Andrea Volpini

14:12>> With some other small shareholders that

Nathan Latka

14:15I see. You mentioned adding more to the ESOP pool. If you do another round, are you planning to raise additional capital in the next twelve months?

Equity Structure and ESOP Pool

Andrea Volpini

14:22>> Yes. So we see that generative AI, it's it's a great opportunity. So we saw that we could, you know, double on major clients. And and and there is a significant opportunity because we are at this specific point in time where we have learned that the quality of the data is as important as the language model. Mhmm. And so the more we can focus on strengthening, the tooling that creates and qualifies the data that we ingest from

14:49>> client, the better the content will get. And so we wanna double on that. And I wanna increase the speed. I wanna open an office in The US, and I wanna have a, you know, a larger product team. And so

Nathan Latka

15:01How much are you looking to raise, Andrea?

Fundraising Plans and Target Valuation

Andrea Volpini

15:04>> We are looking at between 4 and €5,000,000.

Nathan Latka

15:07Okay. And how much equity do you think you have to sell to get that deal done?

Andrea Volpini

15:11>> Max 20%, no more.

Nathan Latka

15:13Interesting. Something like a 15 to 20,000,000, you know, pre post money valuation.

Andrea Volpini

15:17>> $20,000,000 would be a fair would would be a fair number, you know, considering Europe, the evaluation are slightly lower. If we would be in San Francisco, that would be maybe a 35, but, but, we're in Rome.

Nathan Latka

15:29When do you plan when do you plan to kick that process off?

Andrea Volpini

15:33>> So ideally, end of the year, beginning of q one next year, we have to, you know, have a solid plan. I don't wanna make, you know, get money if I don't have exactly, you know, the idea of how to spend it. I'm still conservative. So as you could see from my existing numbers, I'm overspending. I don't see value in adding marketing, you know, expenses. If I don't see that, at least I get a three x return.

15:56>> So everything is very much calculated at this point. But yeah, we need a little bit more flexibility.

Nathan Latka

16:02Would you ever consider, you know, keeping your equity instead of selling a bunch and around? Would you consider using something like non dilutive capital?

Non-Dilutive Capital and Growth Philosophy

Andrea Volpini

16:09>> Why not? I mean, we discussed it in the past. I'm always looking at growth first. You know, my target is to have a healthy company that is sustainable enough that, you know, it doesn't, overspend. It remains profitable. But at the same time, we have to kill it on innovation side and killing on on our, you know, in the innovation side, when you deal with very large corporation, you have to work on a technology stack, which is

16:33>> so volatile, like the AI stack these days. You know, we we we need resources, but, yeah, maybe a mix between the two. Yep.

Nathan Latka

16:41Well, good. On that note, Andrea, let's wrap here with the famous five. Number one, your favorite book.

Famous Five Rapid Fire

Andrea Volpini

16:46>> I'm starting to read again The Society of the Mind by Marvin Mysky. This is kind of a

16:54>> major study on how the brain works. And I was passionate when it came out. I mean, think I read it in the nineties, but now I'm rereading again and it's so beautiful.

Nathan Latka

17:05Number two, is there a CEO you're following or studying?

Andrea Volpini

17:09>> I follow several CEO. Yeah. Of course, I have to follow people like, like Mask because I use X or X Twitter. But

17:21>> I have a good relationship with the with the founder of Yoast that we're gonna meet next week, and and and we have a, you know, I think a great relationship. I can learn a lot from him because he sold the company already. Great.

Nathan Latka

17:34Number three, what's your favorite online tool for building wordlift?

Andrea Volpini

17:40>> Personally, I like a lot the work that we do with Zapierre. I think, you know, kind of connecting dots and automating marketing, it's it's good. But, yeah,

17:51I think

17:51>> second second answer is wordlift, of course.

Nathan Latka

17:54Number three, what's your sorry. How many hours of sleep do get every night?

Andrea Volpini

17:59>> I mean, I should do better. I mean, I think we have, you know, six six and a half, I mean, depending on the period of time now, it's very low.

Nathan Latka

18:08And what's your situation? Married, single, kids?

Andrea Volpini

18:10>> I'm married, two kids, very happy.

Nathan Latka

18:12And I think you had a birthday, right? You're 46 now?

Andrea Volpini

18:16>> Yeah. In March.

Nathan Latka

18:18Very good. The last question, something you wish you knew when you were 20.

Closing Remarks

Andrea Volpini

18:26>> Oh boy, when I was 20 that I could already focus on kind of my dream idea rather than, you know, kind of learning from from from the bottom up. You know, I could I could focus in the beginning on things that I loved. Yes. I mean, not that I didn't not that I did things that I didn't love, but I could be more crazy, even more crazy than I was already.

Nathan Latka

18:49Guys, wordlift.io today does $195,000 a month in revenue, up from $103,000 a month just a year ago. They help large brands like Ray Ban quickly use AI to write meta descriptions for all their thousands of skews on all their sunglasses. They do that same thing across other brands using their knowledge graph, enabling you to build a real AI strategy and increase human productivity, launching all these descriptions within your own company's voice based off the data you

19:17feed wordlift.io. He's got 800 paying customers. He profited $70,000 last month. So really healthy profit margins. Last raise was $800,000 at 5.5 post. And we'll be looking to do his next round in Q4 this year, Q1 next year, targeting 4 to 5,000,000 at somewhere around a 20,000,000 valuation. Again, scaling nicely with a team of 27 engineers, five on the sales side. Andrea, thanks for taking us to the top. One more thing before you go. We have

19:47a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 1PM Central. Additionally, remember these recorded founder interviews go

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