SaaS Interviews with CEOs, Startups, Founders
EP 364: $300,000 Per Year Worth $15 Million?
23 Jul 2016
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000 unit sold mark.
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I give away $100 every Monday. Today's episode is 364 Top Tribe, and coming up tomorrow morning, you're gonna hear from Amit. He went from consultant to $300,000 SaaS business very fast. Top Tribe, good morning. Our guest today is Jonathan Gillen. He's the founder of RoostDropertyTax.com, Double Tap Ventures. He's had over four failures.
He's a relentless hustler, advisor, troublemaker, optimist, and freestyle rapper. Jonathan, are you ready to take us to the top? Ready to go to the top, Nathan. Nice, man. Okay, tell us about Roost. What is it and how do you make money?
So Roost is a peer-to-peer marketplace for storage and parking spaces. Basically, we take any empty space you have, like a garage, attic, basement, closet, driveway, give you the tools, the trust and safety. uh, to monetize it to neighbors who want to store stuff or park cars with you.
Okay. Very interesting. So what is the, uh, like how do you make money? Like who's the seller? Who's the buyer? Where's your cut?
So, uh, the transaction happens and, uh, we take 15%, uh, and, uh, it comes from both parties. It's just, uh, Actually, you know, one side can see the transaction fee coming from the other. And it's actually kind of a funny paradigm with transaction fees because to the renter, we have hosts and renters, right? So the renter sees $100 per month and the $115, the host gets $100 or the host gets
wants to get $100 and the renter will pay $115. So it's all perspective, which side you look at it. But anyway, money goes through, we take 15%.
So I am right now looking at a unit you have listed in San Francisco, California. Its title is Indoor Garage Parking, Lower Pack, Pacific Heights. It's $295 per month. That's what I see. You're saying the person listed this for 15% less than that, but you've built in your 15%. That's right. OK, got it. You're doing this for just storage and also for parking spaces.
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Chapter 2: How did Jonathan Gillen start his business journey?
Okay. So you don't take really, again, you build that 15% kind of into the price. Walk us through some kind of economics around the business, starting with a timeline. What was your business founded in?
So we started in November 2013 was when I came up with the idea.
And what was your one revenue? I was like asking that.
what was year one revenue was nothing like $2, right?
Yeah.
$2. It was, it was me running around with a spreadsheet, uh, knocking on people's doors. You know, I once sat outside. So, so here's how I felt. It was kind of funny. I went knocking on people's doors, which is something I did with my last business, property tax, asking if they had any extra space and, um, getting their info on a, just a spreadsheet.
And then, um, I found there was a storage facility that was shutting down in San Francisco, um, and, uh, is on 7th and Townsend Townsend.
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Chapter 3: What is Roost and how does it generate revenue?
And I actually. got a camping chair and sat outside that storage facility every day for two weeks while people who were coming to move their stuff out, they came with a truck and I was right next to where they would open their window and punch in their dial code to open the gate to the storage facility.
And I was there ready with a flyer telling them that I'll move them out of the facility for free if they move into a roost unit that I could also save them money on.
how many total people were renting at that space and what percentage did you convert into roost customers?
There's something like, there's something like, um, a thousand like five hundred to a thousand people going i must have got like 10 uh it's not that much but it's hustle baby certainly enough to uh get some money going and get something started why not just buy the the whole storage unit uh that's uh sold for hundreds of million dollars i'm sure to be put to use as a uh
as a, uh, office building or, or, you know, yeah, it's getting, getting torn, uh, torn down. And that's, what's happening in a lot of cities, actually, it's causing a storage crisis. And, uh, that's presenting a really big opportunity for roost because there is a, Severe lack of alternatives. And that's what Roost does. We provide storage alternatives.
So since 2013, how many total buyers have you had and how many sellers total?
We've had like 500, 600 buyers total. And sellers, we've got probably about 2000 spaces now.
Okay, but does each person list only one space or does some sellers have 10 spaces?
Actually, some have more. Our average, like three to four spaces per host. And that's something per seller. And that's something that we're actually actively pursuing a strategy around. So how many unique sellers do you have? Not spaces available, but unique sellers? Unique sellers, probably like...
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Chapter 4: What challenges did Jonathan face in the early days of Roost?
Yeah. Okay. I don't have the numbers right in front of me, but it's, it's, it's ballpark.
What is the, so as of May, 2016, what is your monthly recurring revenue?
Uh, 20, we're doing about 25 grand a month.
Okay. 25 grand per month. How, okay. So you, okay. 25 grand per month. And is that after you pay the person's driveway who you're renting to then park a lift on?
uh yes okay because i imagine that's your biggest cost right is you list the place for 300 bucks a month you pay the person 100 bucks a month and you take 200. yes is that the model or is it different no no we we take uh so we take the 15 oh got it so the person might list it on your oh yeah yeah we already went through this sorry yeah listed for for 100 for 100 bucks a month you're taking you know 15 bucks a month on top of that okay so i have to ask you this um
from a, from a rational, if I was Kevin O'Leary interviewing you, John, right now, I'd go 25 grand per month and I'm paying like a $15 million post-money valuation. Yeah. It must be out of your fucking mind. How are you getting this kind of valuation?
Well, we've got an extremely strong market opportunity and funnels for both the demand and the supply side that we've proven out to be cost effective and scalable and And right now it's the product. We're focusing on products right now. We're going to be releasing a bunch of really nice, awesome new tech pretty soon.
And it's really about the potential that's been validated on both sides of the market.
Jonathan, remind me how old you are again? I'm 26. 26. So, okay, so we're the same age, right? So let me just run through something with you because I'm just curious. You've done, okay, so you're doing 25 grand per month as of May 2016. That's last month, which means you're doing about $300,000 on an annual run rate. If somebody came to you today, how much equity do you still own in the business?
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Chapter 5: How has Roost expanded its market presence?
You're not really interested in it.
Not keen on it. And I know what I can do and I know what Roost is capable of. And I see a, you know, there could be a $50 million exit in like a year or something like that. What do you think you'd have to grow revenue to, to get a $50 million exit?
Yeah.
You know, I think it's probably around like a million dollar to five million dollar run rate. Yeah. maybe 5 million to 10 million, something like that.
I was about to say, yeah. So you're saying you think in a year you can go from 200, 300 grand per year to five.
Oh yeah. Yeah. 300 grand per year is, is the drop in the bucket that we have going on right now.
Well, dude, prove me wrong. Make me look like a fool. Come back on in a year. Yeah. Do make me look like a total dumb ass for even questioning you. I hope, I hope you kill it, dude. I love the business. So, Hey, if people want to follow you personally online, where can they do that?
So you can follow medium.com slash at John Gillen, J-O-N-G-I-L-L-O-N. I write a lot about my startup journey. I've been writing this blog series called Nationwide Expansion dot dot dot. Fuck me. And it's just a totally honest look under the skirt of a recently funded company as we attempt to scale across America. That's great. Tell them the story of the ups and downs and everything.
the greatest business show on earth is coming to Austin Texas on October 6 this year featuring a big big moment called launch we're gonna have influencers on stage launch a product compete like heck to see who can sell the most in 60 minutes to their online audiences you'll get to watch See how they sell. See how they close. See how they get traffic. See how they use their list.
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