SaaS Interviews with CEOs, Startups, Founders
EP 376: $5M on $15M Pre Money Goal For BlockChain Based BurstIQ
04 Aug 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 soul mark.
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For your guys' chance to win 100 bucks every Monday on the show to build your idea, simply subscribe to the podcast on iTunes now and then text the word Nathan to 33444. Again, text the word Nathan to 33444. Top Tried, this is episode 376. Coming up tomorrow morning, you'll hear from Jodi Fox. She's designed over 6 million shoes, has raised over $24 million via her company, ShoesOfPrey.com.
Top drive. Good morning. Our guest this morning is Frank Ricotta. He is the current CEO of Burst IQ, the company's secure blockchain-based intelligent data grid that connects people to data for care, for health, and really for life. His achievements span multiple industries to include defense, healthcare, cybersecurity, and finance.
He has many, many patents in the fields of cybersecurity and machine intelligence. All right, Frank, are you ready to take us to the top? Absolutely. All right, let's do this. Okay, first things first, what is Burst IQ and how do you make money?
Yeah, Burst IQ really is a platform service. So how we make money, we build connections. So we build connections to data for people. And our revenue model is really based on a transactional-based service.
Okay, so tell me the story, the one you can talk about of a last customer that paid you, how they specifically paid you and what they're using it for.
Yeah, sure. You know, we have actually have several customers on the platform now. And really, our goal, our goal has been really to recruit, recruit partners, partners who really want to build an ecosystem, ecosystem of connections. So our first large customer is the University of Colorado Anschutz Medical Campus. And we're
helping them implement a regional network so they can implement new care models, integrate new digital services. And so the revenue model is based on a base platform fee as well as a transactional service fee.
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Chapter 2: What is BurstIQ and how does it generate revenue?
Well, very cool. I love, I see. I love the big exit stories or the big, big failure stories, right? So you're bouncing back. You're now starting this year, your own thing by, by chance or the two co-founders you're working with. Have they been with you since that, that big bust?
Well, one one was and one shortly thereafter when we want to put another small company together was a marginal exit, but a pretty solid one. So we've been together about 15 years now on and off through a couple of companies.
That's great. OK, so let's let's dive deeper into Burst IQ and some of some more of the unit economics as of last month. So May 2016, how many unique customers are you working with?
We're roughly about 10 now, but four really good, what I would call ecosystem partners. So we're really pushing out into scaling to different aspects of the market.
And what is the average kind of customer? What do they pay you either monthly or annually?
Annually, annually is going for the base, for the base, for the base product annually is between 250 and 1 million, 1 million a year annually.
Okay. Got it. Yes. You're very much in the enterprise space. Correct. And you mentioned kind of a base plan. Is that, is that the plan you're focused on right now or are people paying for other plans as well?
No, we're focused on that right now to get the base platform up and going so we can scale behind it. So it's really about connecting into legacy data sources right now and providing this great integration layer for the provider space.
Okay. And what is the, if you take all the annual revenue and obviously divide by 12, what was last month's total MRR?
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Chapter 3: What challenges led Frank to start BurstIQ?
So we've been in, in the first six months, you know, looking at the bank account, we just had a few hundred dollars in there at one particular point in time.
Hold on Frank, I was expecting you to say I got burned in 2009, keep 27 months of runway. No.
Well, maybe after we go get some institutional capital, but no, at this stage, it's really just working to keep your head above water and cash flow and trying to invest the profits we are making back into key growth elements. You have to be really smart about where you're putting the money.
Yeah. So you're making about 75 grand a month and you're spending, what, about 80, 85 grand per month?
Yeah.
Yeah, we can hang under that 75 if we need to, but we push it a little more. Obviously, we've got to invest in some of the growth areas.
That makes a lot of sense. Are you looking to raise capital now?
Just in the early stages of getting ready to launch our Series A raise. As you know, we're part of 500 Startups.
Oh, yeah. I was going to ask that. So the 125 for 5% that they typically take, was that included in the 250 that you raised?
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Chapter 4: What was the first-year revenue for BurstIQ?
That'll be a fun story.
Yeah, absolutely. Well, now I know that's pushing it, but what the heck you got to, you have to push.
Yeah. If you don't believe you can do it, who's going to believe you can. Exactly. Now tell me real quick. Are you guys all based in San Francisco?
Actually, we're mostly based in Colorado. Oh, very good. Which part?
Denver. Okay, good. My mom's up in Loveland, so I'm there all the time. Union Station is my favorite place to just go. I would find a Denver just to work for a day at Union Station.
Oh, yeah. Denver's an awesome, very vibrant city. It's got a great digital health community, particularly with the collaborative, Prime Health Collaborative, and this new industry integrator called Catalyst HTI. That's where we're going to be camping out starting next year.
Are you connected? I'm sure you probably are, but are you connected to David Cohen and all those guys out there, tech stars?
Um, yeah, I, I know, I know all those, I know all those guys at tech stars. We haven't been part of the tech stars program. A couple, you know, a couple of, uh, the guys that sit on my advisory board have been, uh, been mentors through that program and, and know the guys over at founder as well.
Oh, that's great. Yeah, that's good. They all, a lot of smart people in Denver. So very good. Well, Frank, you're building something special. If people want to connect with you personally and follow you on this journey, where can they connect with you personally online?
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