SaaS Interviews with CEOs, Startups, Founders
1264 Why Marketplace DIY Tool CEO Wants to Raise $500k on $3M Pre Money
09 Jan 2019
Chapter 1: What is the marketplace tool introduced in this episode?
She founded a marketplace tool, do-it-yourself credit led back a couple of years, well, not even a full year ago, so we'll call it early 2018. Now 120 customers paying 150 bucks a month, so 18 grand per month in revenue, mostly getting those customers through content marketing.
They are cashflow positive, bootstrapped right now, team of five in Paris, looking to raise 500 grand on a $3 million pre-money valuation here, maybe early next year. Churn, they've turned about seven customers out of 120 so far. They're looking at increasing onboarding and technical support to make sure they keep that churn really low.
This is the top entrepreneurs podcast where founders share how they started their companies and got filthy rich or crash and burn.
Chapter 2: How does the company generate revenue?
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million.
I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc.
Chapter 3: What is the current financial status of the company?
are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everybody. My guest today is Charlene. Say it again.
she says it so much more beautifully than i do right that's what i was on purpose anyways she is working on a great company called crazy she's a serial entrepreneur with seven years experience in marketplace businesses from paris and currently settled in new york she is a marketer always looking for new markets to conquer charlene are you ready to take us to the top yes i'm ready sorry no problem no problem so tell us about the company what does crazy do and what's the business model how do you make money
Okay, actually, Chrysalid is a SaaS solution which helps entrepreneurs and companies to create their marketplaces The idea is to create your marketplace in minutes without struggling with coding or development. The way we earn money is we are a classic SaaS solution.
Chapter 4: How does the company plan to manage customer churn?
So it's a monthly-based subscription. And we also have an app store with additional plugins you can take. So we also get upsells.
Okay, very good. Cashflow positive, which is a nice place to be. You're bootstrapping the company. What about churn? That's critical in any SaaS company.
Chapter 5: What strategies are being implemented for customer onboarding?
How are you keeping churn down?
Yeah, churn is something we started experiencing a few months ago. We have lost like seven clients. This is something I wasn't used to before. Most of our clients are startups or entrepreneurs. So churn is something that we anticipated from the start. Trying to turn it down is to have a great onboarding from the start.
We realized that the people are seeking not only for a technical solution, but also for marketing support and business support. And sharing our experience of marketplace businesses is something really essential in the whole strategy to turn down the churn, actually.
Why are people, when they do churn, why do they churn?
Chapter 6: What are the company's funding goals and valuation plans?
They churn. We have two types of people churning. Most of them churn because they realize they don't really have time to manage their customer acquisition. We told people to start with acquisition of vendors on their marketplace because this is the easy way to do it. And they realize that it's a lot of effort and time to dedicate to this task. And they just get scared.
So we have to accompany them on that point. And all the people just don't find what they were looking for. what they need in the solution. But it's not really... We're trying to have a lot of feedback when people churn. And what we've heard is that as we were on the early stage, maybe we needed to have more technical support on the solution. So we started working on that during summer.
And now churn is essentially when people just... can dedicate the time and the right amount of human resources on the marketplace project.
If you guys are like me, it was quite a shock to me when I was building my first company, Heyo, and we reached like 10, 11, 12 people. And all of a sudden I'm going, wait, why am I getting notices from all these states? And that's because I had to file payroll and stuff in these states as we started hiring people from remote locations. It was the biggest pain in the butt. I hated the paperwork.
I hated the payroll.
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Chapter 7: Why is product-market fit critical for the company's future?
And so now today when I'm launching new companies, hiring new remote employees, I use a company called Gusto. It's very simple. Payroll benefits in HR for modern small businesses. What I like most, and I've timed this, it takes about seven minutes on average for my folks to run payroll. It's got fast, easy to run payroll, including W-2s and 1099s.
I love that they have health benefits and 401ks all built in for nearly any budget. So you kind of just pick what you want. And they've got expert HR support just to call away so you don't have to hire, you know, HR people in-house.
But most importantly, it frees up my time so I can go back to my monday.com Kanban board, you know, plan the next sprint, you know, put the next spec out on the line and talk to three more customers. If you want more effective payroll, you know, a lot of people change payroll providers at the end of the year. Now is really the best time to switch.
So listeners of the podcast, you can go to nathanlaca.com forward slash gusto to try a demo and test it out. Again, that's nathanlaca.com forward slash gusto. And you'll get three months free once you run your first payroll. All right, I'll see you there. So 150 bucks a month on average, 120 customers, 18 grand per month, cashflow positive. You're bootstrapped today, team of five in Paris.
Any plans to raise capital?
Yes, of course. We are currently discussing with European VC right now.
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Chapter 8: What advice does the guest share about entrepreneurship?
So this is something we are working on. Nothing is done yet. But what we are trying to do first is to go fast. Now we want to go further. And for this, we need, of course, money. So this is in progress for us now.
How much would you like to raise, ideally, do you think?
Ideally... It's really recent, but ideally, we would need to achieve what we have to do between $500,000 and $1 million to do it right.
So if you go raise $500,000, obviously you still have to negotiate this, but what valuation would you like to raise at?
A valuation of about $3 million. Okay. Yes.
So maybe raise $500,000 at a $3 million pre-money valuation.
Yeah.
That's great. And do you think you'll close that maybe this year or you'll do that in early 2019? No.
Better in early 20s. I think in next year. Next year, probably right now, we're really focusing on the product. This is essential for us. We're trying to achieve this product market fit. We are like maniac on that point. So this is something we are discussing right now to achieve it, I think, next year.
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