SaaS Interviews with CEOs, Startups, Founders
1474 Advantages of IoT+SaaS with $2.5m Revenue CEO of Senorberg
07 Aug 2019
Chapter 1: What is the main topic discussed in this episode?
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Guys, all of you that listen to the podcast, you were the reason I wrote the book. SaaS CEOs, founders, entrepreneurs, go grab it today at capitalistbook.com. Especially if you like audio, go grab the audible version right now. Again, capitalistbook.com. Sensorberg, it's a SaaS plus IoT play, really wiring workspaces, adding a lot of efficiencies there. Founded this product in 2016.
They're doing about 50 grand per month right now in pure play SaaS revenue, 2.5 million in terms of last 12 months revenue. So a significant portion of hardware. They're looking at obviously scaling the SaaS business. It was nothing about a year ago, now serving about 20 customers, hundreds of doors per customer. expansion's great.
They haven't lost any customer after the hardware's been installed. That's a big advantage of the IoT plus SaaS kind of space. Currently looking to raise 3 million bucks on call, maybe a 20 million or something like that, pre-money valuation. We'll see what happens. This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to two point seven million.
I had no money when I started the company. It was one hundred and sixty million dollars, which is the size of the IPOs.
We're a bit strapped. We have like twenty two thousand customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Michael Von Roeder. He works both as an entrepreneur and a corporate executive.
He currently serves as CEO of Sensorburg, a SaaS IoT company. As the founder and investor of various startups in the areas of mobile energy and fintech, he's firmly anchored in Berlin and the international founding scene. All right, Michael, are you ready to take us to the top? I am. All right.
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Chapter 2: What is Sensorberg and how does it integrate IoT with SaaS?
Yes, I do. He sits at my board and I actually meet him next week for lunch. So it's all good.
Very good. And team size. Obviously, it's a tough transition. Were you guys still fairly small and nimble or is this a big transition?
Chapter 3: How has Sensorberg's revenue evolved over the past year?
No, actually it was, I took over the company with 30 people. It's now 30 again, but the people are different mostly.
Ah, I see. Okay, so about 30 folks. Good. Okay, let's get into the product. What's the company doing? How do you make money?
We make buildings interactive. We usually start with accessing the building because that's usually the first interaction with the building. So we do digital access control and from there we bring in sensors and actors like, you know, heating valves and temperature sensors and we control the lighting. So what we're trying to achieve is an interactive experience with the building so you can
enter you can book your meeting rooms you can receive your amazon package you can receive your groceries and so on and we do that with an open platform because we believe in the future it's not going to be like the ge or siemens doing all that with a proprietary solution but it's you know many folks can contribute so we work lots with other startups who provide their apps and we integrate with them and so on and we make money well first of all we do our own hardware uh so we make money with that and the margin sorry the margin on that business is what
Well, 50% right now, but actually in my ideal world, I would give away the hardware for free and just make money with the second part, which is a SaaS model. So you pay basically, let's say, I don't know, 10 bucks per door per month. If you have one door, if you have more doors, like we have customers who have 200 doors, obviously you pay less.
And then you can add additional sensors and actors and you pay per unit, you connect to the IT platform.
Interesting.
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Chapter 4: What unique advantages does the IoT + SaaS model provide?
Okay, so I don't want to go down every single kind of customer size, but on average, how many doors does the customer have?
Average is difficult because it really ranges from one door to thousands. But on average, that would be 500, but that's a bit misleading. So, you know, there's... Let me ask you differently.
Let me ask you differently. How many total doors are you installed on today?
Let's say 5,000.
5,000. Okay.
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Chapter 5: What strategies is Sensorberg using to scale its business?
Across how many different kind of logos?
You count in the tenants. It's a lot of logos.
Let me say 20. Okay, 20. Good. Okay, good. So this is kind of like an enterprise sale. You find one of these 20 people. You say, how many doors do you have? Boom, you do the hardware, you do the software, and then you go to the races.
That's the idea. Although we usually start with co-working spaces because for them it's really nice to have our solution because they have a member app and we make the member app smarter. So the member app is not only for engaging with the community, but also with the physical space of the co-working space. Interesting. That's our pitch, right?
And then what happens is that corporates, they all, you know, the new way of working and stuff. So they use co-working concepts and that's how we get into the corporates.
Okay. And the 10 bucks per door, that's obviously just on the SaaS side, right? That doesn't touch the hardware?
Yes.
Okay. So that means like, I mean, can I take 10 times 5,000 doors? You're doing about 50 grand a month right now on pure SaaS?
Theoretically, yes. But obviously we give some heavy discounts, A, to grab some of the market and B, if you have more than one door, you know, it goes down. Why? Because in the retail, sorry, in the real estate industry, at least in Europe, very conservative. So they don't understand SaaS. So they want to buy the whole system. So what we do there is we say, hey, no problem.
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Chapter 6: How does Sensorberg generate revenue from its services?
This product was launched two years ago.
Okay, so 2016.
And what we also see is, you know, it's not only zero churn. We get one, let's say, co-working. So you get one space from Mindspace or WeWork. Once they like it, you grow with them. So we have several co-working spaces in Germany and we grow with them every month. They open a new space and we go in without additional sales efforts.
So what is your typical year one to year two expansion on a customer?
Well, I would say usually we start with one. I take one which is called Unicorn here in Berlin. So we start with one just two months ago. Now we're at six. Next year, they're going to do 20.
Okay, 20 doors? Spaces. Buildings. Okay, but I don't know what your revenue is per building. I just know the door thing. So how many doors is that?
So let's say that's in an average space, let's say it's 50 doors. So you go from 50 to 300 to, what would that be, to 20 spaces times 20 doors, 400, yeah, 400 doors.
Okay, interesting.
So it goes nicely, yeah.
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