SaaS Interviews with CEOs, Startups, Founders
1680 Why Even After Raising $1.4M, $180k MRR CEO Having Trouble Hiring Developers in Finland
29 Feb 2020
Chapter 1: What is the main topic discussed in this episode?
His company, One.io, is really integrating business and connecting services. It's basically a B2B integration hub. They've just passed 40 customers, paying on average $4,500 a month, so $180,000 in monthly recurring revenue. That's up from $95,000 a month just about a year ago. They're operating at about break-even, just raised $1.4 million a month.
Chapter 2: How does the company One.io generate revenue?
Team of 15 trying to hire more developers, but ultimately it's a struggle in Finland because it's a specialized skill set he's looking for. The team, again, is in Finland and the UK. 0.1% revenue churn per year. So obviously really healthy economics. Lifetime value about 36 months or 162 grand. Spending about, call it 60, 70 grand to get a new customer. So 2.2 LTV to CAC ratio there.
Hello, everyone. My guest today is Yuha Berghal. He's a serial entrepreneur with a wide experience in IT domain from software development to services and software solutions and sales, and along with 15 plus years in service management. He's got an excellent track record of building and leading winning teams.
His personal goal is to help business leaders to see information technology as an organic and critical part of their business, not just a hard to understand expensive techie driven cost center. Yuha, are you ready to take us to the top?
Chapter 3: What challenges does the CEO face in hiring developers in Finland?
Yeah, let's go. Okay, so tell us what the company name is first, because you're going through a rebrand right now, and then help us understand what you do and what your business model is.
Yeah, company name is still Service Flow, but we are rebranding ourselves, and the service or the product is already called One.io. And One.io is a business-to-business integration hub that enables these different business service providers and providers Buyers like IT, customer service, facilities management.
Subcontractors, internal teams without any technical development just by subscribing to our service.
And what's the pain? So someone that wants to do that right now without you, why is it painful?
Well, it's painful because of... Typically, this business service area, which is, for instance, IT outsourcing, we don't have any standards like you have in ERP, you have EDI or something like that. We don't have any standards. So it's really kind of integrating processes and data that is human-driven, so to speak.
And also, the trend has been quite a while already so that companies are buying products best of breed services, which means that they have multiple different suppliers and providers working together in order to provide the service. So if you address this thing with traditional way of building integrations from the scratch, you're never going to get there.
It's too time consuming, too expensive, too complex, and there's nobody taking care of the actual thing that is middle that it would work.
And is your business model PurePlay SaaS or are there services involved as well?
We are PureSaaS.
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Chapter 4: What is the business model of One.io?
We had our company, consultancy company, we were running at the same time. But I would say that we've been doing this As a day job, so to speak, since 2014, 15. Okay, very good.
And you launched it, okay, 2011 to 2014, it was kind of, again, you pre-launched, I would say 2014, you're really getting in all the way. So you've been selling for four or five years now. How many customers have you scaled to today?
Customer base is something like 40 customers, large enterprises.
If I take 40 customers times that average you just gave me of 1700 US dollars per month, that would put you at around 70,000 US bucks per month. Is that about right?
Well, the MRR at the moment is 160. Euro?
Yeah. Okay, 160,000 euro? Yeah. Okay, so that's about 180,000 US dollars. So that's great. All that means is if you have 40 customers, your average price point, they're each on average paying you about 4,500 bucks a month. It's a little higher than the 1800. Yeah.
Yeah. Because the customers pay the subscription in order to access the hub, and then they pay what they use, which means how many connections they have, meaning the integrations.
Ah, really smart.
So that's how it scales.
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Chapter 5: How has the company scaled its customer base over the years?
So lifetime value is 162,000. If we divide 162 by 2.2, I think that's what, like 70 grand. You'll spend 70,000 bucks to get a customer.
That could be the case. But we also, since that's a, we have a channel model in place as well already. And so that's kind of a little bit different.
What kickback do you pay the channel partners? Sorry? What kickback do you pay the channel partners?
Uh, 30% discount from the enterprise enterprise end user prices for the first year.
Okay. So if a channel brings you a $5,000 a month customer, you're going to pay the channel 30% of the five grand a month.
Yeah. For the first 12 months.
Yeah. That's great. Very good. All right. Let's wrap up here with the famous five. Number one, what's your favorite business book?
Uh, I don't know if it's exactly a business book, but it's a, it's really, really good, um, uh, book that it kind of covers the business as well. Well-being, um, Aki, Aki Hintos, who was the formula one, uh, doctor for Kimi Raikkonen, for instance, he has this book called, uh, anatomy of, of, uh, winning. So that's a really good book.
Anatomy of winning. Number two, is there a CEO you're following or studying right now? Um,
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