SaaS Interviews with CEOs, Startups, Founders
1606 The Right Way To Use Venture Debt to Hit $320k in MRR
17 Dec 2019
Chapter 1: What inspired the creation of Aisle Planner?
Sold his first wedding company for call it a couple hundred thousand bucks. Used all that money to plow it into his new idea, aisle planner. Selling into really the wedding planning industry. However, 15% of his user base or paid customer base actually are doing other things like product launches. So they're expanding a bit, now doing about 320 grand a month in revenue up from 150 grand a month.
about a year ago. Healthy growth bootstrap. They've used venture debt, and it sounds like used it very effectively, serving over 8,000 of these planners today. They've got a team size of seven based in San Diego, 4% revenue churn annually. That's obviously on a gross basis. When they do spend money, they spend 100 bucks to get a new $40 a month customer for a three-month payback period.
Hello, everybody.
Chapter 2: How has Aisle Planner expanded beyond wedding planning?
My guest today is Rob Faro. He's got 25 plus years of experience in building, designing, and implementing strategic marketing programs and is a firm believer in asking why and challenging norms. Throughout his career, he's been fortunate to have worked with several great companies in the tech, consumer product, automotive, hospitality, entertainment sectors with a unique set of demands and needs.
He's taken this collective experience into his role as CEO of his current company, Aisle Planner, where his focus has been on creating a solid corporate foundation, developing their brand DNA and developing the highest quality customer experience through best in class product. Rob, are you ready to take us to the top?
Yeah, let's see what we can do here. Hopefully give you something entertaining and enlightening.
All right. What's the company do and what's the revenue model? How do you make money?
So we're a platform as a service. First of all, we're targeting wedding and event industry. We've been at it for about four plus years. We saw a large demand in that space to basically upgrade the technology platforms that were currently available. It was largely an antiquated and ignored field, but it makes up
an incredible $100 billion worth of annual sales in the US and about $330 billion globally. And a majority of our team, including my co-founder, came from the wedding industry, so it was something we knew very well and we were very intimate with and we wanted to make a change and make a difference.
Okay, so wedding planning tools, what's the revenue model here? Is it a one-time fee or is it SaaS or what?
It's SaaS, it's a monthly subscription fee based on the volume of weddings you plan on the platform.
Okay. Yeah. I was going to say, so it's not the actual kind of, you know, folks getting married. Cause that's a one-time thing. It's the wedding planners paying a subscription fee.
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Chapter 3: What is the revenue model for Aisle Planner?
Whereas conversely, a corporate event planner will very rarely do a wedding. So we're seeing about 15 to 18% of the events on our platform right now are non-wedding events. Oh, great. Including product launches for some pretty high-profile brands that we were humbled and honored by. We had a little customer service call. We value our customers' privacy extremely.
So we rarely look into the accounts unless there's an issue. And one of our clients also looked in and we realized the clients they had were like, wow, is it okay if we share that? They're like, yeah, that's fine. But it was amazing.
So who was it?
Can't share publicly. I can share it around the office.
Oh, got it. Okay, got it. So wait, so how many customers have you scaled to today? How many folks are paying you, whether they're event planners or just product launch planners?
Oh, we've got, oh gosh, between about 8,000 and 10,000 total on the system right now.
And is that free and paid or just paid? That's just paid.
Okay, that's great. It ebb and flows. So there's businesses and then there's customers. Businesses can represent several customers. Planners are sometimes... have multiple planners work organization. So we've got all kinds of different levels of customers.
Yeah. But just to be clear, you have, you call up 8,000 customers or businesses, whatever the verbiage is there that you want to use, you know, paying call at 40, 50, 60 bucks a month, something like that. Yes. That's great. Talk to me about churn. Obviously it's critical in any SAS company. What's your churn and how do you manage it?
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Chapter 4: What strategies does Aisle Planner use to manage churn?
The investment isn't predicated on opportunity. It's predicated on performance. So it made really good sense for us. We didn't need a lot of capital. We needed a small amount to do a sprint that we wanted to kind of push ahead some product. and we were just short on our ability to cover the cost. And that arrangement was very fair and equitable to us.
Yeah, Rob, I want to just be clear. I want to dig deeper here because I think it says a lot about lighter. So, you know, I'm very familiar with venture debt. You know, there's a bunch of different terms. Lighter is typically they will go down to the smallest companies. You got to be north of about 15 grand a month for them to work with you.
They'll typically lend you anywhere between three and kind of five X your current monthly recurring revenues. And they typically look for like a three to four year repayment period with like a one to three to one point five repayment cap. Now, what they'll always say when they work with new entrepreneurs is if for any reason at the end of that time frame, you're in trouble.
Well, we will never like be aggressive and shut the company down. We'll always do like a recap. We'll just renegotiate. Am I hearing you accurately? You fell into that. You didn't grow as fast as possible, but they were really friendly in helping renegotiate.
We actually grew right on path and we actually were able to go back for a second tranche as needed. We didn't need it initially, but we got offered it. We went back and were able to take more money when we needed it. They've been a great partner. We've never missed on any of our milestones with them. So I've been very, very stoked. I can't speak to someone who has missed on that side.
Our relationship has been nothing but open and communicative. We talk to them about once a month in a social capacity. If they ask us for referrals from time to time to other companies because we've been sort of one of their ā I would say probably better ā
better customers down here i guess i couldn't say i don't know the other customer base they have but yeah i mean it's been nothing but easy and and very positive good all right we're out of time let's wrap up quickly with the famous five number one what's your favorite business book oh that's a good one um pass number number two is there a ceo you're following or studying
I used to be enamored with Jack Ma because I thought it was really neat how he was bringing Alibaba to the forefront, and I liked his personality. I have not really been too engaged lately with anybody else other than our own business.
Number three, what billing tool do you use?
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