SaaS Interviews with CEOs, Startups, Founders
1694 How This 28 yo CEO Hit $70k in MRR with Patreon Partnership
14 Mar 2020
Chapter 1: How did Sai Hossain launch Crowdcast and achieve $70k MRR?
launched crowdcast back in 2015 now a thousand customers paying 70 bucks a month 70 grand per month in revenue up from 30 grand a month just a year ago so healthy growth on really no marketing spend which is great they've raised a million bucks burning less than five grand a month right now in terms of cash flow seven folks on the team remote and in san fran about five percent revenue churn between five and ten percent revenue churn per month as they look to scale and hopefully invest more in the tech especially and also increase margins with the new video partnership they've just launched
Hello, everyone. My guest today is Sy Hossein. He's the CEO of Crowdcast, a live streaming and webinar platform for professional creators. Born in a small village in Bangladesh, he immigrated to the country at a young age and slowly made his way to Silicon Valley. There, he teamed up with some great thinkers to design and build a new way for people to share ideas at scale.
Sy, are you ready to take us to the top? Yeah, I'm excited to be on the show. The audio is breaking up a little bit now. No worries. We'll be good. Talk to us about Crowdcast. What's the company doing? What's your revenue model? How do you make money?
Yeah, I mean, ultimately, we are structured in a similar way as a webinar platform in the sense that it's a SaaS platform that we have customers paying us on a recurring basis. But ultimately, you know, we're basically kind of combining what you see in the live streaming world with what you're getting in the webinar space.
So we're giving the tools that you typically get in the business world, but giving you the experience of social live streaming. Okay. And give me a use case, like name a customer that's paying you and how they're using you.
I mean, a good example is just yesterday we had Amanda Palmer, who's a YouTube celebrity, and she had about a thousand people who are her patrons paying her on a monthly basis, but she's able to hang out with them over Crowdcast. So she's combining Patreon with Crowdcast, which is one of our integrations. I was going to say, is that an API play there? Yeah, it's an integration.
It's one of our deep integrations and they're like a really close platform. Ultimately, they have a lot of customers that are also creators. We call it the professional creator market.
So not necessarily like enterprise companies or things like that, but individual solopreneurs, small businesses, and I would say innovative startups that are trying to use live video to grow their audience, do marketing, and do content. Very cool. Help us understand kind of your revenue model. Is it a pure play SaaS company? It is from a structural point of view.
But typically, SaaS companies are going after larger businesses, whereas we're going after like the solopreneur style sizes. Yeah, well, I mean, just to be fair, there are thousands of companies with sub $100 a month plans that are SaaS going after kind of SMB. So help me understand kind of average price point. Are you talking $100 a month on average or what? Yeah, around $89 is our midpoint.
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Chapter 2: What unique features does Crowdcast offer compared to other platforms?
And then we basically kind of regutted the whole thing and rebuilt it in a way that actually people would pay for. And so the following year, 2016, is really our first year in business. That's great. Very good. And so how much have you raised to date? Just about a million from seed investors. Okay, good. So yeah, enough to kind of cover basic things, get things going, not be too overfunded.
Exactly. Yeah. Yeah. And so, you know, our goal, I mean, typically in SAS and you're trying to get to like that million dollar run rate and we're not there yet, but we're pretty close. So we want to make sure we hit that number before we go out for the next big round. How close are you? Well, we're basically about breakeven.
Uh, I mean, officially speaking, we're, we're close to around the 70 K mark in MRR. That's great. And you said you are breakeven or you're still burning a little. We're, we're almost breakeven. So we were still slightly not profitable. But that's basically our main project right now. Ultimately, video infrastructure, as you might have guessed, is probably the most expensive API out there.
And so we kick things off with a company to kind of pull it off and kind of show people this is possible in the browser. We're doing a lot of fancy stuff here. And now we're in the process of kind of bringing some more of that in-house. That's great. So, I mean, when you say close to breakeven, you mean you're like, you're burning like five-ish grand a month or something more aggressive?
Less than that. Oh, good. Okay.
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Chapter 3: How does Crowdcast integrate with Patreon for creators?
That's great. Very good. And then help me understand growth. So if you're at about call it 70 grand a month today, where were you about a year ago? Yeah. I mean, we must've been around 30, I would say 25 to 30. Where's most of that growth coming from? How are you getting, you know, these customers? Yeah. I mean, we're a small team. We're like less than seven people. And so
We've been pretty much leaning in on our network effects of Crowdcast directly. When you do an event, you are incentivized, obviously, to market that Crowdcast event. And in the process, you're exposing more and more people to it. And those people might see your event and be like, wow, that was a cool platform. I want to use that myself.
So we've been almost 90% of our growth has been just natural, organic growth through our users using Crowdcast. That's great. And how many customers are you at today? We're past a thousand essentially. Yeah. Just past that. Cool. I took 70,000 divided by 89 bucks a month and got out 787 customers. Is that just because you maybe have grandfathered ones paying a little less than 89? Exactly.
Yeah, exactly. We had a starter plan back in the first year. Okay. Got it. So yeah, that would make the average closer to 70, but today the ones signing up are called 89, 90, something like that. That's great. Talk to me more about CAC, right? So are you doing any direct paid spend, even if it's not Facebook ads or Google ads? Do you have salespeople or anything? Honestly, no.
I mean, we're probably in sort of the odd end there in the fact that we haven't done any sort of real paid acquisition at all. And that's probably because we're just like a small team and there's only so many things we can do. So yeah, we don't really have any sort of clear salesperson on the team. We've been pretty much just focused on
90% product and a little bit on the marketing end in order to sort of tell the story of Crowdcast, but we haven't done any sort of like direct stuff.
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Chapter 4: What is Crowdcast's revenue model and pricing strategy?
Where are you guys all based or are you remote? We're mostly remote, but you know, me and my co-founder out here in the San Francisco Bay area. That's good. And churn's critical in a SaaS company, especially at 89 bucks, like at this price point, right? What's your churn today and how do you keep it low? Yeah, I mean, that's a difficult one.
It depends on sort of, you know, so with live video itself, you typically get a lot of people who are starting and stopping and So you get to turn from like 5% to 10%, depending on which plan you're on. That's logo churn per month. That's, that's, that's, uh, I guess that's per month. Yeah. Yeah. Okay. But, but is it logo churn per month or revenue churn per month or they're the same?
What was that first word? Is it logo churn per month or revenue churn per month or are they the same? Oh, uh, that's, that's revenue essentially. Okay. Got it. Very good. 5% revenue return per month. And then, um, do you have any strong ways to drive expansion revenue? Like people for people to upgrade, like number of seats or higher bandwidth or number of people watching or things like that?
Yeah. I mean, primarily it's based on the number of live attendees per event. So, you know, at our business plan, you get 500 people live in the event on the lowest plan, you get about a hundred. And so what we do is sometimes it's hard to predict. Actually, it's always hard to predict how many people are actually going to show up live. So we have overage fees.
And so if you're getting more than 100 people showing up on the light plan, you're probably getting enough overage fees that you want to hop onto the bigger plan. So that typically is what drives expansion revenue. But besides that, I mean, we'll occasionally do like campaigns to push people up to annual plans.
uh, like the one we just did last month, which was really, really well, um, to just give a, give us a, you know, a lot of cash forward. Yeah. Yeah, exactly. That's great. Very good. And then, um, let's, uh, I'm curious, when was the last, uh, the last round of funding? When'd you do it? What month? Man, uh, it must've been at the beginning of 2016. Okay.
So any, I mean, any plans to scale me and if you had additional capital, do you know where you might spend it to drive growth or drive the tech? Yeah, I mean, most immediately, probably get some sales folk on Crowdcast. There's just a lot of segments that we can really go after. But beyond that, we do want to invest a little bit more on the engineering side.
Running sort of the infrastructure is a very complicated piece of the puzzle. And as we do more and more backend DevOps stuff, we need a team to sort of manage that. And that would really help us bring costs down as far as video so that we're spending our money wisely when it comes to growth. Yeah, interesting. Are you in any plans right now to raise or you're talking about raising?
Nothing serious, you know, mainly our main goal is just to kind of get to profitability first before we even open up conversations. Yeah. Have you looked at just so you don't have to keep taking dilution? I mean, have you looked or research venture debt at all? And if so, what do you like or dislike about it? It's an interesting concept.
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Chapter 5: What challenges has Crowdcast faced in its growth journey?
You know, I've talked to some folks who've done that before. So we're open to it. We're not we're not very much. I don't really have like strong opinions one way or the other. Other than that, I like the idea of us having more control over the company over the long term. And we don't really have any interest in selling for the next five to 10 years. You know, we have a lot of
plans it's coming up in the future so that's something that we are looking at but we haven't seriously considered yet yeah that's great all right so very good let's wrap up here with the famous five number one what's your favorite business book favorite business book or any book you struck me as a guy that's kind of like very peaceful and centered you probably have some good books related to that
Yeah, yeah, yeah. I mean, well, here's a business book that I really appreciated recently. It's from Brendan Burchard. It's called High Performance Habits. And I could go deep into it, but I've been really enjoying it lately. Is that because he's a big customer? He's not, but he would be a perfect customer. He would be, yeah. Number two, is there a CEO you're following or studying right now?
I really appreciate Jack Conte from Patreon. Um, he's got like this amazing ability to do crazy stuff outside of the company that actually works really, really well to build personal brand reputation that ultimately helps Patreon. So I found his leadership to be pretty, pretty great. His Ted talk is really good back from like 2014, I think, or even earlier.
Number three, what's your favorite online tool for building your company? Online tool like SaaS platforms that we're using any tool. It's probably going to be Intercom. As soon as we introduced that, we definitely saw sales just drive up very, very quickly. The ability to be able to respond and capture interest right as it's happening and convert that is really, really powerful.
Number four, how many hours of sleep are you getting every night? About seven, I would say. Yeah. Yeah. Good situation. Married, single kids. And I'm married. Uh, I'm living in a tiny house village in Oakland. Um, and yeah, I mean, thanks to the Brendan Burchard book and a lot of other things in my life, I've been pretty consistent in getting around and getting up around 6 00 AM every morning.
So not married and no kids. I am married. You are married. Okay. Married, no kids. And how old are you? What's your guess? Oh, I would guess you're probably around my age 29. Nice. I just turned 28 yesterday. Okay. So let's say I get extra credit for that. That's pretty good. All right. Last question. What do you wish you knew when you were 20?
Um, probably that you have the ability to learn whatever skill you learn to get to your goals. If I just really like drill that into myself back when I was 20, I'm sure I'd be a little bit further. Folks, you have the ability to learn anything you want. Coming from Cy, launched Crowdcast back in 2015.
Now 1,000 customers paying $70 a month, $70,000 per month in revenue, up from $30,000 a month just a year ago. So healthy growth on really no marketing spend, which is great. They've raised a million bucks, burning less than $5,000 a month right now in terms of cash flow. Seven folks on the team, remote and in San Fran, about 5% revenue churn, between 5% and 10%.
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