905 Went Public, $650m Market Cap, Crashed, Now $10m ARR But Only $1.8m Market Cap, Why?
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This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million. I had no money when I started the company. It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Peter Friedman.
He's a social media visionary and veteran with over 30 years of experience in the space. He's the founder, chairman, and CEO of Live World. He's also the author of the CMO's Social Media Handbook, a step-by-step guide for leading marketing teams in the social media world. Peter, are you ready to take us to the top? We're here and delighted to be here. Good, very good. So help me get in your brain real quick. Your average day, more time on Live World or more time on the social media stuff?
Oh gosh.
How did Peter Friedman start LiveWorld with no funding?
Well, it's kind of the same thing, but really LiveWorld. Okay. So tell us.
Yeah.
When you're the founder manager, you know, you live and breathe it.
Yep. So tell us about LiveWorld. For those that are not familiar, what's the business do and how do you make money?
Okay. LiveWorld is a social customer experience company that makes a conversation management SaaS platform and provide services to manage customer conversations for large brands and social media and messaging. Brands like Walmart and American Express and Pfizer and things like that. And we make money through licensing them the software to use, providing them the online agents to use it, and consulting services, a strategy in their entire approach to social media and messaging.
So you're not, I mean, is your SaaS revenue enough where you consider yourself a pure play SaaS? Or do you have so much professional services mixed in that it's really more of a 50-50 balance?
It's both. I mean, the actual revenue numbers vary. And most of our clients buy a package. So how you break out the software and the services is kind of arbitrary.
Okay. Well, the margins are very different. What's that? I mean, it's not necessarily arbitrary. I mean, the margins are very different on a SaaS play versus a high-touch professional services play.
Well, there's actually three different businesses in there. There's the SaaS, which typically is going to have 80%, 90% margins. There is the workforce agents, which typically has 70 something percent margins. And then there's consulting services, which typically have, you know, 40 percent something margins. The space where people get it mixed up, is they combine the workforce agents and the consulting and they think uh you know just scales like professional services when in fact it scales quite a bit more especially if you have our technology which really helps us got it got it so you're able to preserve some margin because you've built tech that helps you execute these more efficiently and faster with less human time right and the technology is designed not to replace humans but to scale the human touch so does all kinds of things
that technology can do, and then queues up the customer conversations for humans with tools that let them go very fast and efficient, but with a human touch.
So what is the, to avoid kind of going down every customer cohort across all your different lines of business, what would you say the average customer is paying for your SaaS platform?
Oh, gosh. Well, it's tens of thousands to hundreds of thousands for the SaaS part.
Per year or month? Per year. Per year. Okay, got it. So we'll say minimum 10,000 a year. That's a good average?
Oh, well, the minimum is really probably 30,000 to 50,000. But it's so blended in. And we've had some of these clients for over 10 years. And so exactly what they've got and the way they're using it, it varies.
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