SaaS Interviews with CEOs, Startups, Founders
EP 403: $650k Raised, Finland SaaS Copmany, 600 Customers with PromoRepublic.com
31 Aug 2016
Chapter 1: Who is Max Pechersky and what is PromoRepublic?
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.
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the $100 is Zach Faron. He's a 22-year-old Apple employee, and he's listening to the show and loving it. For your chance to win $100 every Monday, simply subscribe to the podcast on iTunes now, and then text the word NATHAN to 33444 to prove that you did it to enter.
Chapter 2: What challenges do marketing freelancers face?
Top Drop, this is episode 403. Coming up tomorrow morning, you'll hear from Roy Mann, who did $360,000 in June of 2016. He's on track to do $4 million in annual recurring revenue. He has 5,000 customers paying $70 per month on average with his company, DePulse. Okay, many of you heard I made a big league acquisition of a company called SendLater. And I'm a greedy business guy.
I didn't want to give away equity to a technical co-founder. So I found my coders on a website called Toptal at NathanLatka.com forward slash T-O-P-T-A-L. I've paid over $12,000 to the site to a guy named He Sheming in China, who I've never met, but we're going to build a big business together. I'm taking SendLater public by the time I turn 30.
Chapter 3: How much revenue has PromoRepublic generated since its inception?
I'll tell you more about Toptal later on in this episode.
top tribe good morning our guest today is max perchersky and he's a passionate entrepreneur and business developer but most importantly he's the co-founder of successful digital agency who quit cool agency job to jump on board of a content marketing startup called promorepublic.com to make it globally successful max are you ready to take us to the top yes i am hello hello hello hello okay so tell me first it's a little unclear are you the ceo of promo republic
Yeah, I'm a co-founder and a business developer. So I'm taking care of everything that connects Promo Republic with outer world. So investments, partners, hires, and also talking to customers a lot.
So you say you're a co-founder, or how much equity in the business do you own?
I own, I'm like the second largest part of the business. So the initial idea comes from my co-founder Valery, and I was actually a mentor to this startup in an accelerator in Ukraine. And after that, I became an advisor. So I got a small chunk of the equity.
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Chapter 4: What is the customer acquisition cost for PromoRepublic?
After that, I invested. And in 2014, I quit operations in digital agency I was part of and jumped totally full-time.
How much did you invest?
I invested $30,000.
Okay, and how much of the company now do you own? What, 10%, 20%, 30%?
So it's slightly above 30%.
Okay, great. So tell us about the business. What does it do and how do you guys make money?
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Chapter 5: What strategies are used to reduce churn at PromoRepublic?
Okay, so it is a software as a service that helps with content marketing. So what we do, we help marketing freelancers to create content, high quality content for social networks, really fast. How we do that? Our main feature is a calendar of content ideas. So marketing freelancers are pretty frustrated on Monday when they have to fill all those content calendars of their SMB customers.
And they lack ideas. They have to create ideas all the time. And we have a calendar of ideas. We help them.
Chapter 6: What additional revenue streams is PromoRepublic exploring?
with finding out what holidays are today, what days from the history, what content is trending now on social networks.
So Max, back up a second. What year did you found the business in? What year was it created?
It was created at the end of 2013, actually. And it was a totally different business. We made actually two pivots. We started social media promotions. You could create really fast contests, sweepstakes, lotteries on social network. And we were selling to agencies.
Chapter 7: How much capital has PromoRepublic raised and what funding models were used?
And Max...
what was your total revenue in that first year, 2013? Uh, we were pretty successful.
So the revenue within like first four months after launch was a 30 K Euro. And, uh, but those were not non-recurring revenues.
Yep. And now let's go into a 2015 total revenue. What was that?
2015, uh, 2015, that was total. Okay.
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Chapter 8: What life lessons does Max Pechersky share from his entrepreneurial journey?
So about 10 K. 10K, but those were recurring revenues. And we're really good at growing.
Wait, what does that mean? No, no, no. So if it's $10,000 per month, you actually made $120,000 over the year.
That was in total, unfortunately, that year. That was 10K in total. So we closed the year 2015 with €3,500 recurring.
Okay, so what are you doing? It's July 2016 now. What did you do in monthly recurring revenue in June of 2016?
So now this is close to recurring revenues. So now this is about 6K. However, during the first half of the year, 2016, we made another pivot. We pivoted in terms of market, in terms of product, and we're building pretty many things in terms of R&D.
And how many total customers do you have paying you?
At the moment, 600, 400 from our previous stage. Those are owners of small businesses in Europe. And we managed to onboard approximately 200 marketing freelancers from US.
So this is what we're proud of. So 600 customers paying you about six grand per month. So is it fair to say they pay on average about $10 per month each?
Yeah, but really differently. We managed to hire prices on US market a lot and also create additional value for freelancers. So those guys, owners of small businesses in Europe are still paying 12 to 20 bucks a month. However, in the US, our package starts with $50. And the first payments were sold for 200.
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