SaaS Interviews with CEOs, Startups, Founders
1727 He Spent $100k on MVP, Can He Scale During Virus?
16 Apr 2020
Chapter 1: What updates does the host provide at the beginning of the episode?
Hey guys, I'm recording this here on April 5th. It's Sunday. Everyone's trying to survive the crisis. Quick note to you guys. We are moving, you know, you used to delay these episodes by, you know, four to eight months after we recorded them in terms of releasing them on the podcast. We've changed that.
A lot of these interviews you're going to hear over the next many months are going to be ones we recorded only.
days prior we think that's a smarter way to run the show i've made the change so expect more urgent information coming out secondly i am getting destroyed on itunes reviews by these people that say nathan's rude he's hard-hitting blah blah blah which by the way i am it's part of my style it's what works the problem is people that love that style never take the time to go leave a five-star review
So I only get one or five star reviews on iTunes. And right now there's a streak of one star reviews that is driving me crazy. It would mean the world to me, guys. If you're loving the show, you love how direct I am. You like the style. If you go leave a review on iTunes now, if you do that and tweet it to me, text it to me, email it to me, whatever you want.
I'm going to reply with a very special surprise. I think a lot of you guys will really like it is heavy, heavy data oriented. All right. So I appreciate that. Thanks, guys. Enjoy the show. Stitched Insights, helping brands better understand customer sentiment, how they're feeling, doing SWOT analysis, and not just doing the analysis, but also ranking.
We'll see how it performs, obviously, in a time when, obviously, there's potentially a global recession here. Shifts change, but people still care about what opportunities and how their customers are feeling. And Dimitri hopes he can position himself nicely in that niche. Hello, everyone. My guest today is Dimitri Pavlov.
He's the founder and chief executive officer of Stitched Insights, which is helping companies predict opportunities and threats to their customers and how happy their customers are. Dimitri, you ready to take us to the top? All ready to fly. All right. So give us some context on the company real quick for people that missed your first interview. So is this like an MPS kind of tool or what?
Actually, we're launching something very similar to NPS tool, but this is much deeper. This is essentially we're trying to upend traditional market research by leveraging a new state of the art kind of deep learning natural language processing. And by doing that, we're actually able to generate things that are more predictive than surveys.
Really, we're able to understand customers on a level that traditional market research hasn't been able to.
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Chapter 2: How does Stitched Insights utilize customer sentiment analysis?
We're also looking at market research as an additional channel partner as well. We've gone through system integrators. So these are folks that are actually on the market research side, the ones that are conducting the surveys. So we're actually partnering with the folks that are doing surveys and processing their text in a way that they have never been able to process before.
They've been throwing manpower and essentially consultants and professional services at these problems.
So with these new partners, you know, you launched in 2018 when you last came on, which was November of 2018, you told me at about five customers at the time, how many are you serving now today?
Right. So that was, that was really, really cool. So we've, you know, as you know, we're an early stage kind of technology company. It's, to ramp up the growth is very important to do carefully in the correct focus. So we've been very careful in who we're partnering with.
So since then, last year, we've essentially did a couple of POCs with some really big brand names and a number of smaller pilots with some mid-tier folks. And from that, we've actually found that retail and market research is our beachhead, essentially. So we have now partnered with two additional large brands. So we've actually engaged with one of the largest media conglomerates,
And we're working on a very, very cool use case with them. And we're actually working on an expanded pilot.
So to make sure, are you still working then with about five customers? They're just very different customers than they were two years ago?
So there are, no. So we have actually now about nine folks that we are engaged with. Okay.
Are those like SaaS contracts that are like monthly or annual recurring?
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Chapter 3: What innovative approaches does Dimitriy Pavlov discuss for market research?
Okay, so one five ARR target for 2020. What did you finish 2019 at?
We finished actually below, we squeaked under having any substantial ARR last year and we're kicking in this year for our actual engagements. So last year was a lot of POCs and a lot of one-time pilot engagements.
So for you, okay, so ignore SaaS revenue and ARR for a second. If you just look at cash collected last year from these POCs, from the pilots, from any consulting stuff, what was that in 2019? Yeah.
Yeah. So I'll give you a range. Maybe it's in the realm of 100K or so.
Yeah. So so so this is I mean, look, by the way, this is fine. So when you came on in 2018, you said you did about 60,000 that year. Again, early stuff, building a product still. Last year, you get up to about 100,000. Again, early testing, things like that. You're kind of hunting around. Who can I land into a SaaS sort of contract? Right. Are you still doing all this bootstrapped or be raised?
We actually, we did raise last year. We were, I guess, officially considered venture-backed at this point, which is really cool. We've brought on board some really, really good folks that are strategic investors. We're very careful about not over-raising. How much did you raise? We raised a little over $100,000 last year, which let us essentially get into our strategic accounts right now.
And out of those folks, we're actually able to bring on board a couple of really strategic advisors that are very senior at some very targeted firms for us.
So how are you funding all this? Because again, when you came on in 2018, you told me at about 10 people with just $60,000 in total revenue for the year. Either you found cheap labor or you're putting a lot of your own money behind this to cover losses while you build it.
So initially, I did put a lot of money behind this and made a bunch of stupid mistakes. That was before really even Stitched Insights took shape.
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Chapter 4: How does Stitched Insights differentiate itself from traditional survey methods?
We burned money on tests and designs and things that were – How bad was it?
Like you burned $100,000 or $10,000 or what?
Yeah, actually a little under $100,000. grand maybe maybe like 50 grand of building a website we didn't really need that since then a bunch of founder stories that were really true and since then I've realized okay we can actually bootstrap a lot of this in a way that partnerships let you bootstrap in a way that you couldn't otherwise so GSV Labs
We're a portfolio company of GSV Labs, so through that partnership, we have lots of really great discounts and credits and things like that that we've been leveraging. There's law services and there's hosting services. There are hundreds of thousands of dollars of credits, for instance.
The other side of this is we do have cheap labor, essentially, because the folks that are involved with the company really believe in what we're doing. So the team right now has grown to 13 folks. We have about half, a little less than half of the team is full-time at this point, and the rest is part-time. The full-time folks are taking still a discounted salary, basically.
We started a very small trickle of pay at the beginning of this past year for our executive team. And basically, the idea is we're building this in order to get it commercial ready by the end of this year. When we reach essentially Series A readiness, we're all going to come on board and start really
How do you as a guy that's moving from MVP to trying to scale in the midst of a global recession and massive crisis to like so the world hasn't really seen before? I mean, how many of these full time, you know, you have your executive team can keep working for just equity when maybe their spouses at home just got laid off or don't know what their works don't look like.
I mean, how do you handle all this?
No, absolutely. And this is this is such a crazy time right now where, you know, lots of uncertainty drives a lot of. a lot of behavior that wouldn't have been otherwise. What I'm seeing right now is, again, kind of this divide between folks that have a little bit of a buffer and are using this time
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