SaaS Interviews with CEOs, Startups, Founders
1599 How to Spin a Company Out and Run It Yourself, Even if You Have No Control To Start
10 Dec 2019
Chapter 1: What is Contentino and how did it start?
contentino launched back in 2016 officially as it spun out of an agency now serving 358 customers paying 112 bucks a month for 40 grand a month in revenue from 8500 bucks a month just a year ago cash flow positive bootstrap team of seven in prague and slovakia 14 revenue churn per year again helping these agencies really scale social and manage social media marketing social media sales things of that nature inbound on social media willing to spend up to 280 bucks to acquire a customer for a three-month payback
Hello, everybody. My guest today is Bo Pukstafel. He studied innovation and operation management in Copenhagen and then went on to work at West Virginia University Innovation Center where he was in charge of their marketing strategy. In March 2016, he returned to Slovakia where he got an offer to join the team at Triad Advertising and take over their internal software, Contentino.
After two years, he and his team were able to get the company into more than 800 agencies and brands all around the world. Today, the software is used by famous brands like Asahi Beer and Volvo, as well as advertising agencies like BBDO, Ogilvy, and VMS. L. All right, Bo, are you ready to take us to the top? Sure. All right. So tell us first, is this a software company or an agency?
It's a software company. It's a software as a service. Okay. And so help us understand why agencies are paying you.
Chapter 2: What challenges did Contentino face in its early days?
What do they get? Sure. When you have advertising agencies creating content for their clients, Uh, especially social media content. Uh, you have so many people involved, like copywriters, graphic designers, and these people need to collaborate somehow file exchange, et cetera. And then you have clients like brand managers.
They needs to prove the content, the social media content, the agencies are creating and the old fashioned way of doing it, like Excel sheets, emails. It's just obsolete waste of time. A lot of mistakes and errors are happening.
So Contentino puts all these people into one transparent platform where the workflow, the communication, the task assignment, the approval, the social media planning is happening. Interesting. And on average, what do these customers pay per month or per year for the software? The average plan is about 100 euros a month.
But we are really focusing to do upsells and to increase this average amount of recurring revenue. So if you look at all your customers, on average, they're paying you about 100 euros per month.
Chapter 3: How does Contentino support advertising agencies?
Yeah, on average, one customer pays 100 euros. Or about 112 United States dollars. That's great. So walk me through kind of the history here. So when did the company launch? When was it built into this larger company? And when did you start running it? So Contentino initially was an internal tool for one advertising agency. They created the software for their internal needs four years ago.
And at the beginning of 2016, they felt like, okay, there must be more agencies having the same problem as we have. So accidentally, I met them at an event and Then I started running it. I was a one-man team the whole 2016. Then we started to build our own team. And now we are completely independent from the agency.
Chapter 4: What is the pricing model for Contentino's software?
That's great. Okay, so you own the majority of the company. You're independent of the agency? No, I have some percentage with our CTO. And the agency still owns some percentage as well. Okay, the agency owns a majority of the company? Yes. Okay, got it. But it spun out in 2016? Yes. Okay, and how many customers do you have now?
We have 358 paid accounts and altogether it's, it combines like 800, more than 800 agencies and brands because one account can have multiple brands and agencies within one account. Okay. But the 358 customers, those are the ones that pay you on average 112 bucks a month. Yes, exactly.
Chapter 5: What growth strategies has Contentino implemented?
So if I multiply those two together, it means you're doing about $40,000 per month right now. Is that right? Yeah, that's correct. And where were you a year ago? So we can understand growth. Our monthly revenue a year ago was about 8,000, 7,000 euros a month. Okay, so good. So about 80, 8,500 United States dollars, healthy growth there. Where does most of the growth come from?
How are you getting these new customers? A year ago, we've got a really heavy strategy on Facebook advertising. Like how much on Facebook ads? It was about 2,300, 2,000, 3,000 euros a month, just purely on Facebook conversion ads. And we were generating a lot of high quality leads, which we could convert to paid customers. Right now, Facebook advertising is not really scalable.
Chapter 6: How does Contentino manage customer acquisition costs?
So we are looking for different channels like Quora, social media monitoring, inbound marketing, content marketing, et cetera, et cetera. Got it. So we were lucky to get first 200 people paid accounts within the Facebook ads. Now we need to look for different channels. Is the company, I mean, have you guys raised capital or are you bootstrapped? We bootstrapped.
Okay, but does the agency just basically subsidize you every single month so they're just pouring money in? Not anymore. We are cash positive for past half a year. So we already paid everything back to the agency, what the agency invested. Okay, and how many team members today? We have seven and we are hiring heavily. Everyone in Slovakia? Yes.
Chapter 7: What are the current metrics for Contentino's performance?
Oh, very good. I love that. In Prague, I'm sorry. In Prague, we have a team there as well. Okay, Prague and Slovakia. And then what's churn? Obviously, it's critical in a SaaS company. Yes. When it comes to value, it's about 1.2%. It's very low. We are losing a lot of small accounts, a lot of... So to speak clear, that's 1.2% revenue churn per month? No, it's a revenue churn.
Okay, or about 14% per year. Yes, yes. But of course, the account-based churn, it's a bit higher.
Chapter 8: What advice does the guest offer for aspiring entrepreneurs?
You mean if you measure by logos? Yeah, because it's smaller customers churning. Yes, yes, exactly. It's about 5%. Do you have meaningful expansion revenue yet or no? You don't have an expansion model built out yet? We are building it at the moment. We are really trying to find a strategy how we can cross-sell, up-sell the existing accounts. So we are working on it at the moment.
And right now, to get a new $100 a month customer, what are you spending on fully-weighted CAC? It's 250 euros. Okay, so about what, a two or three-month payback? Exactly. That's pretty healthy. And where's most of that money being spent? Just ads and testing ads on Quora, Facebook, and other places? People. Oh, people, headcount, okay. Yeah. Interesting.
So that's including like the salaries of your sales or marketing people. Yeah. We, we focus a lot on customer success management. So, uh, these people are getting the biggest package, uh, from, from the revenue. Yeah. Yeah. In terms of like commissions. Yes, exactly. Yeah. That makes sense. Uh, all seems pretty natural to me, but let's wrap up here with the famous five.
Number one, what's your favorite business book? It would be Purple Cow by Steve Cullen. I know it's kind of old school, but it was the first marketing book I've ever read. So it popped into my mind as the first one. Number two, name an under-the-radar CEO in Slovakia that you like or respect. That's a good one. Mr. Rostinsky, he is from Exponia. Yeah, that's it. Peter, right? Peter, yeah.
He was just on the show recently. Yes. All right. Number three, what billing tool do you use? What billing tool? Yeah. We use Braintree. Okay. And number four, how many hours of sleep do you get every night? Seven to eight. I'm trying to get eight, but sometimes it's tough. And what's your situation? Married, single, kids? I'm single. Good. No kids? No kids. And how old are you? 27. 27.
Last question. What do you wish your 20-year-old self knew? Just do what you like to do. Just don't do stuff you hate and focus on stuff you really enjoy and you believe that you are good at. Guys, do what you love. Contentino launched back in 2016 officially as it spun out of an agency, now serving 358 customers paying 112 bucks a month for 40 grand a month in revenue.
from 8,500 bucks a month just a year ago. Cashflow positive bootstrap team of seven in Prague and Slovakia, 14% revenue churn per year. Again, helping these agencies really scale social and manage social media marketing, social media sales, things of that nature, inbound on social media. Willing to spend up to 280 bucks to acquire a customer for a three-month payback.
Beau, thank you for taking us to the top. Thank you so much.
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