SaaS Interviews with CEOs, Startups, Founders
1549 Why Did He Leave a $60m Revenue "Unicorn"?
21 Oct 2019
Chapter 1: What is the main focus of Oichao in the Brazilian market?
Oi Chao launched in 2018, really focused on the Brazilian market, helping people understand, again, time tracking across their employee base so they can avoid surprise salaries they have to pay at the end of each pay period. He's launched the company just this year. Now a couple hundred customers paying a hundred bucks per month.
So call it, you know, 30 grand per month right now in revenue, 1.6 million raised, 3% logo churn per month or around that. In terms of, you know, scaling up paid spend, he's happy to spend, call it 200, 300 bucks to acquire a customer. So two or three month payback period, team of 14 people,
based down there in Brazil, building this up with the goal of hitting a million bucks in ARR in the next 12 months Hello, everyone. My guest today is Lonnie Schneiberg. He's a serial entrepreneur working online since 1998. Investing.com is one of his companies on its way to becoming a privately funded unicorn with offices around the globe and over 300 employees and 60 million bucks in revenue.
His other company, Oi Chow, is a time and attendance solution which started in Brazil to solve the problem of 3 million annual labor law-related lawsuits in the country alone. Lonnie, are you ready to take us to the top? Definitely.
Chapter 2: How is Oichao's customer base and revenue structure evolving?
Okay.
So, so are these investing.com and Oichao, are they separate companies or are they tied together somehow?
No, they're separate companies. Uh, some of the partners invested also in Oichao, but, uh, these are two separate entities and, uh, uh, one is running in Brazil and the other is in international, uh, monster actually where we're, uh, growing pretty fast. We just surpassed Bloomberg in traffic recently with 100 million sessions a month on the site alone. So it's a
It's a very, it's a major operation.
So, okay. So that's investing.com 60 million bucks in revenue. Compare that to Oichao. I mean, what's Oichao doing right now in terms of revenue?
Oichao is a, that's a good deal. Oichao is a baby, but growing very fast. Uh, there is a, there's a big issue in Brazil, uh, which is related, as you said, there are 3 million lawsuits a year. Uh, business owners not necessarily know the extra hours that their employees are doing.
And then they found out at the end of the month, they need to pay a few extra salaries because of these extra hours, which they're required to pay by law. So, okay.
Um, so is it, I mean, is it, it looks like based on the website, you're essentially kind of time tracking for employees and managers pay for this.
Correct.
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Chapter 3: Are Oichao and Investing.com connected or separate entities?
Uh, it's a time and attendance, uh, application. Um, But it's a very smart application. So we know to identify the where, the who, and the when, when people punch in or punch out, how much time they need, all the extra hours that they need, notify about any problem which is outside what the manager configures in real time to the manager.
So you don't need to wait for the end of the month to find out you have a problem with an employee. You get the information in real time. The next day you can already invite an employee, chat with them and solve the problem.
Got it. Well, yeah, I mean, you never say you have a dumb tool, so it sounds pretty smart. That's obviously a good thing. When managers are signing up for this, I mean, what's a typical kind of company paying on average per month for the tool?
To be honest, what happens is that The employees, actually, they take the tool home with them and then they can manage the cleaning lady or create a profile and manage the cleaning lady and the babysitter. On the other side, we have various companies with over 5,000 people. And some of the, actually, the government is also looking into it.
testing some tools, we're running some pilots, so covering a pretty big scope of the businesses.
Okay, yeah, but what I'm trying to do is understand pricing. So maybe on a per seat basis, what are people paying on average for this?
Well, to convert it in dollars, you know, the reality has been moving so much in the last few days. So it's a few dollars, a few dollars per employee. And the pricing just depends on the amount of employee you have and the actual plan that you choose. We're also launching right now a solution for... Hold on, hold on, hold on.
Lonnie, sorry, I don't want to get off that subject because I want to understand it because I'm still not clear. If we look at your entire kind of base and all of the seats on your platform, whether it's someone managing their cleaning lady or someone managing 5,000 employees, on average, what's the per seat price? And in reals is fine.
On average, it's about a hundred and some dollars. And sometimes, again, like if you look at the majority of the companies, we're looking at small businesses, but then you have major companies with thousand employees and up, which would change the average completely. But the majority in terms of amount are the smaller businesses.
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Chapter 4: What challenges does Oichao face in the Brazilian labor market?
In the area.
Okay. Yeah. So and then what I'm trying to understand here is you have a free kind of a free plan as well. So what is it like? I mean, how many free users do you have on the platform and where do you show them the paywall?
Sure. So it's actually it's not a free plan. It's a free trial. Just a 14-day trial. After that, we ask them if they want to continue with us to a paid plan.
Okay, does the free trial require a credit card at the beginning or at the end?
no uh at the end at the end it's not it's not a premium model okay got it very good and then look i i love the kind of focus on getting to a million bucks in arr that would be call it 83 grand per month it sounds like if you've got two or three hundred customers today at that arpu you told me about 100 bucks you're somewhere around call it 20 30 grand per month today is that accurate
Like I said, I don't want to go into specifics because we have various companies, some big, which skew the average a little bit, and some government clients, which is a completely different size of contracts. But the goal is a million a year in August.
Yeah, just to be clear, Lonnie, I'm just multiplying the numbers you gave me. You said 100 was an average. Obviously, when you give me an average, it means there are people doing more and people doing less. And you said a couple hundred customers. So I'm simply multiplying. Are you generally doing about 30 grand per month right now?
I'm not going to bring the numbers because, as I said, just for you to understand, a company, if you multiply, then a company, you take one company with 5,000 employees or a few of them, you completely change uh, obviously the average and the growth plan. So I'm not going to go into numbers right now, but, uh, Lonnie, sorry, that number has to be wrong.
Then I asked you, what is your average per month? So you said a hundred bucks per month, meaning there are some companies with 5,000 employees that might pay you 10 grand per month. And there are a bunch that pay you $2 per month.
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Chapter 5: How does Oichao's time tracking application work?
I wasn't trying to.
Okay. Yeah. So just to be clear, moving forward, you're working with governments, you're working with 5,000 team plans. You might be signing much larger deals in the future, but today you've got a couple hundred customers paying a hundred bucks per month, call it 30 grand or something like that per month in revenue. Uh, more or less. Very good. That's helpful to understand.
Bootstrapped or have you raised capital?
Uh, well, we have some angel investors. Uh, we're not, we're not currently looking for extra funding and, uh, um, Uh, we're hoping to, well, we're going to not hoping we're going to reach profitability before, before any, any additional investment.
Okay. So, and why'd you make the decision to raise capital? Why not, you know, try and bootstrap. So you hold all the equity.
Uh, well, uh, market conditions, we wanted to move fast, grow quickly. And this is the, it's a very complicated tool to build because of the technical part, all the statistics and the calculations. So it was just a decision of how fast we want to grow, where we want to be in a year, and what is the capital required for it.
Okay. So, I mean, you said you've raised a couple hundred thousand. How much have you raised to date into the company?
We have, I didn't say, we raised until now 1.6 million.
Okay. And it was all of that equity or was some of that like government grants and things like that?
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Chapter 6: What is the pricing model for Oichao's services?
I mean, you say that like it never happens. It happens all the time.
No, no, of course, of course. I'm saying that the companies are not leaving the tool to move to a different one for any other reason than that. I'm just stating it. We had about, until now, eight companies.
Okay, kind of eight. And so if you look at that at a percentage, is that like 2% logo term per month or higher or what?
Yeah, two points. Yes, it's somewhere in the area.
Okay, is it just too early, you're not really measuring churn yet?
We're measuring, I'm just, it's not, I wasn't expecting to dive too deep in the numbers at this call, so I... I'm just trying to think what I want to reveal and what I don't.
Well, look, the purpose of the podcast is to educate people on SaaS, right? And interview SaaS CEOs. So the easiest way to do that is to understand the data and then have you explain how you either are having success or why you feel like you're not having success yet. And so that's why I asked the numbers, right? Otherwise it is just a fluffy interview.
So churn today, how are you driving churn down? What do you know you have to get users to do within the first kind of session they install the app to make sure they stay sticky?
Well, first of all, in terms of the support and the guidance of the users, we're very hands-on and trying to be more proactive than reactive. So we're well aware of what's going on in the system. And if we see some sign of people stop punching or something happens that we can prevent, we actually contact the customer and try to figure out if there's a problem.
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