SaaS Interviews with CEOs, Startups, Founders
How 30 year old broke $200,000 in revenue for construction project management SaaS
02 Jul 2022
Chapter 1: How did Eke Ustalo get into the construction software industry?
So, I mean, can we take 45 customers, you know, paying on average $20,000 per year? That would put your monthly recurring revenue at like $80,000, $90,000 a month or about a million dollars. You are listening to Conversations with Nathan Latta, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Eke Ustalo.
He's the co-founder of Planyard with background in B2B software and cybersecurity. Now tackling profitability and forecasting in larger construction companies to make sure they don't go out of business due to insufficient visibility.
Chapter 2: What challenges do general contractors face in project management?
Follow along at planyard.com. Eke, you ready to take us to the top? Yes, let's go. All right. Now, did you come from construction or did you come from finance? I mean, my background is IT, so software engineering and cybersecurity. But basically, we really had friends and acquaintances who are in the construction industry.
And the pain that we got with our whole team, from our acquaintances, the pain that we felt in the industry, we just decided to tackle the problem. Interesting. So tell me about a customer that's paying you today and what they get when they pay you.
Chapter 3: How does Planyard's pricing model work for construction companies?
in let's say main contractors or general contractors usually they they have the biggest problems because their projects are the biggest they they often work on projects that are um that takes years to complete that's many millions often hundreds of millions right and they really just don't have any idea what's happening on their project right and and um
There are, of course, software solutions out there, but some of them are so complicated that they are not used in the end and that the companies end up using Excel. So basically, to know whether they are profitable or not, they just do a lot of complicated extra seats, make mistakes there. And in the end, many companies go bankrupt because of this.
And so what are these general contractors paying you on average per month to use your technology? It really varies, right? So it goes to up to tens of thousands. And some of the customers even we think will go to hundreds of thousands. So it's very, it depends really on the company profile and their revenue. You said, sorry, sort of maybe 10k per year up to a couple hundred thousand per year?
Chapter 4: What was the journey to acquiring the first customer?
Yeah, depending on the company size. I see. And what do you mean by company size? So someone paying you a lot of money, they have more projects, more headcount, like what's the value metric? Yeah, so usually it really depends. The companies are run very differently, right? So some of them have their own forces, some of them have a lot of employees, but some of them just have huge projects, right?
So they're building, I don't know, shopping centers worth of hundreds of billions. So it's really, we as a startup always, pricing is very difficult. So it really, it's a combination of all of these things, basically.
Chapter 5: How has Planyard managed to bootstrap its business?
Okay, but I imagine when you get in a negotiation with a large general contractor, they say, what's your pricing? You can't sort of say like, we want to figure out what to price against so that we can make the most amount of money, right? What's like your standard? Is it number of square feet they're constructing in a project? Is it the project value? Is it number of their full-time employees?
Is it timeline to complete? What's the... Yeah, so let's say the biggest one is really the revenue or the volume of the project. And then maybe the headcount as well, right? How big the team comes on board.
Chapter 6: What revenue growth has Planyard experienced since its launch?
I see. So it's sort of based off the... A shopping mall is going to be expensive to build. It's based off the price to construct whatever the project is. The bigger the price, the more they pay you. Exactly. And the more projects, the more also. I see. I see. Interesting. Okay.
Chapter 7: What are the plans for raising capital in the near future?
Very cool. And I guess, again, 10K to 300K per year is a massive range. I understand you have people on both sides. But what would you say your sweet spot is? Is it like 100K per year? Yeah. To be honest, with these bigger companies, there's a lot of work. So actually the sweet spot is the lower end because oftentimes then we can really implement the customers very quickly, right?
The very big tickets are a lot of work. So that's actually not the sweet spot.
Chapter 8: What advice does Eke Ustalo have for aspiring entrepreneurs?
Okay. Somewhere in the lower medium end rather. So most customers paying $20,000, $30,000 a year then, something like that? Yeah. I see. I see. Very cool. Okay. Give us the backstory here. What year did you launch the company? Um, I think when we fully launched 2018 or so, uh, I would say at some point, uh, when did you write the first line of code though?
Yeah, maybe like the first time it'd be 2017. We, we did some experiments, right. Um, some very basic, um, I think Google sheets or like Google, um, presentation mock-ups with the customers. Um, but yeah, somewhere around there. So 2017, 2018. That's awesome. And then how long did it take you to get your first customer?
We had actually, um, so we, we don't do very extensive contracts with our customers. So we tried to keep the legal part simple. Um, so, but we had basically one of the first leads we had was already before we started doing anything.
So we never went into a full on agreement with them, like a full on, like they are a customer, but we never made a contract with them in advance, but they were willing to pay before we did anything. Right. So that shows also how big the problem is. Um, So we can say 2017, basically 2018 from the beginning. That's awesome. That's great.
So then, I mean, were you able to use their money then to continue growing the business? Are you able to bootstrap or do you have to raise capital? We are bootstrapped. I mean, yeah, we use the money for various, we had some, we had more kind of employees and interns working at some point in the beginning, which we use the money for. Because all of the founders basically had side jobs.
Since we're Bootstrap, we needed to do something on the side. So we used money for that. But yeah, I would say the customer, the revenues have made it possible to Bootstrap. So that was your first customer, 2017. How many customers are you working with now today? I think it's around 40 customers, 40, 50 customers, something in that range. Okay, cool.
And then you mentioned early interns and obviously growing the team, trying to be capital efficient. How many folks are on the team full-time today? So it's a complex topic. So we're now actually only three people again. So we didn't raise money. We're in the process of probably raising money soon.
We are three co-founders and we have kind of three, let's say, I don't know how to give a title, a consultant slash... advisors also on board who work with us. So many of the people who started with us, it was a long process with bootstrapping. So many of them got very good offers in like kind of, let's say the big equivalent to the big three or whatever startups.
So I, or not startups, but the big tech companies. And I understand their decision to go from a slow tech, slow growing startup. Do you, do you and your three co-founders, do you own the equal amounts of equity? It's 33, 33, 33. Um, it's pretty close to that. There's a slight deviance, but it's basically that. I see. I see. And you guys are all full-time, right? Or are you doing side gigs?
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