SaaS Interviews with CEOs, Startups, Founders
Ceptinel FinTech Founder Spent $700k, Now Has $6k in MRR, Whats Next?
29 Aug 2020
Chapter 1: What is the main topic discussed in this episode?
To reach equilibrium, I will say we need to sell about two or three more clients. And with that, the company is set. I will say we are fine for the year. And I think the company is going to be ready to kind of reach equilibrium probably by the end of this year.
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We got to grow faster. Minimum is 100% over the past several years.
Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker CEO Frank Behan before Google acquired his company for $2.6 billion.
We want to see a real pervasive data culture, and then the rest flows behind that.
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My guest today is Miguel Buchholz. He has 12 years of software engineering experience and six as an entrepreneur, founding his current company, Varicode, which is at ITAS, co-founding Tutin.cl and Uber for last mile operation organization optimization, SaaS for big companies, and Septennial, a SaaS reg tech that helps financial institutions fight corruption, money laundering, and fraud.
Miguel, you ready to take us to the top? Yeah, I'm ready. All right. So variacode.com, that's V-A-R-I-A code.com. Help us understand what's the company doing? Who are you selling to?
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Chapter 2: What is the main focus of Ceptinel as a SaaS RegTech company?
I know. Um, I know you're, uh, I get your point and it's, it's completely valid. Uh, the, The whole idea of this investment was to get a better product. And right now, I will say after a year and a half, we do have a product That is a package that we can actually deliver to clients and it's going to function fully automatic. So it wasn't the main reason to get more clients.
The main reason for that investment was to get a better product.
But isn't the ultimate measurement of a better product if people are willing to pay for it? You only have six people that are willing to pay $1,000 a month for this product you spent almost a million dollars building.
Yeah, you're correct. You're correct. And we are seeing that in this year, actually 2020, has been the best year. In order to get to three clients, it took us about a year and a half in order to get to the next six clients. And I'm talking B2B financial clients. The times to get those clients vary from six months to 12 months. It's a very, very rough time.
um uh clientele so we and in in the third of the time we got three more clients and now we are actually i will say is the first time in this company we have this many prospects like valid valid actual prospects we have um We have a very big chunk of possible clients right now, and we have never seen that before. Actually, prospects are coming to us.
That is something in previous years didn't happen. So I will say things are tuning up very good this year. For us, independent from the situation, the world is situated.
Yeah, I understand you're in a space that requires a lot of investment to get a minimum viable product out. You've got to have security things in place. The technology's got to be in place. You've got to add a real value and then compound that with the fact that sales cycles are very long. I know plenty of fintech companies that spend way more than $700,000 before they have a dollar of revenue.
So I understand where you're coming from, but help us see the path, right? I mean, how do you get to a million dollars a year in revenue?
Yeah. Right now, what we're doing is basically just pushing sales right now, this year. This year is sales year.
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Chapter 3: Who are Ceptinel's primary customers and what services do they offer?
Commissions included in that. And also take into account, I'm just talking about the minimum, meaning that there's a lot of services that we can provide on top of that. Our last client just bring into a company about 60K. So and that is the license plus all the professional services that we provide. So I was maybe maybe I didn't explain too well, but I was just talking about the minimums.
But on top of that, we do have a lot of additional services like the constructions of those rules.
I think that makes sense if you decided to stay bootstrapped and build a highly profitable sort of business. But the second you take a million dollars of investor money that you've got to be growing at your stage way more than 100% year over year. I mean, you should have taken three grand a month up to $30,000 a month in a 12 month period. Um,
So I get the idea of professional services to help cash flow, but you don't have a cash issue because you raised a million dollars. That cash is to build something obviously more scalable, as I imagine what your VCs would say at a board meeting.
Yeah. As I mentioned, it was money to invest in the product. I will say we are 90% product complete.
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Chapter 4: How does Ceptinel differentiate itself from other SaaS businesses?
The product is very... Very complete. All the dream that we had three years ago is now done. The clients are actually very convinced. The prospects are convinced with the product. The product is selling itself right now.
What do you mean? Miguel, how is the product selling? You have six customers over a two-year period and you have three salespeople and you want them to sell one new customer per year. How can you say the product is selling itself?
Because this year, we just did three sales where we did a little effort. The client was the one actually looking for us, like sending emails, actually doing a buy. We didn't actually do much of a sale. It was a buy. But I understand your point.
Yeah.
uh yeah certainly this rest of the year we are going to probably push it a little further for for sales now that the product is completely what what does churn look like today have any customers started paying monthly and then stopped No, churn hasn't happened. This product generates a lot of stickiness because there is an investment in business logic from the client put into the product.
So it generates a sort of stickiness to the client process.
Yeah, that is an advantage to professional services up front is they're paying you a big chunk of money to get all the integrations done. They're way less likely to leave after they've paid all that money.
Exactly.
Yeah, very good, Miguel. Well, listen, we're rooting for you. Let's wrap up here with the famous five. Number one, favorite business book.
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