SaaS Interviews with CEOs, Startups, Founders
How this SaaS For Music Venues Survived Covid Then hit $3m ARR
11 Sep 2023
Chapter 1: What is the main topic discussed in this episode?
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Guys, prism.fm helps event venues organized with artists and collab on all kinds of show types. Obviously took a hit during COVID. I thought Matt was going to totally die and he just had unbelievable willpower here. Got through it. Went to a low of caught 50, 60 grand a month has now scaled.
much larger than that, caught over 150, 200 grand a month in revenue, 300 customers today, new customers paying on average 11,000 bucks per year for the platform. As he looks to scale, closed a 5 million series A in 2021, potentially looking at now as well. We'll see what happens, but he says he's very close to profitability.
Team of 27 looking to build more payments, potential payments products for the same industry. Hey folks, my guest today is Matt Ford. He's the CEO of Prism.fm. He's a spiritual seeker living the good life in Austin, Texas. When he's not running Prism or he's playing music, hanging with his kids or enjoying nature, Prism helps unfuck the live events industry, which we love.
Matt, you ready to take us to the top?
Yes, yes. I didn't write that.
Did I about unfucking the live music? You did write that. That is verbatim. Don't try and put that on me. But it's been great following your story because you first came on in 2018 when you had just broke $15,000 a month in revenue. And I'm going, oh my God, my guy, Matt, he's going to have a hard time during COVID.
There's no live events going on, but you made it through COVID with a ton of momentum. I guess, why don't you touch on that real quick before we get an update?
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Chapter 2: How did Prism.fm navigate the challenges of COVID-19?
And I know you're not totally against raising money, but the timing of it was ridiculously good. I mean, at the end of 2019, we had a couple million dollars in the bank and I scaled down to a bootstrap team at that moment. Actually, funny enough, I'm full steam ahead profitability these days.
So I've come around to really... Wait, were you profitable in June of this year, last month?
We're working towards that. We're not quite there yet, but we're using our runway to get to there. We're in a healthy place right now. I'm just being completely honest with you. I could make some cuts tomorrow to be profitable, but we're in a healthy place right now and have some money in the bank. We're just coasting to profitability at this point now. Great.
It's really right around the corner and it feels good, but you know, we weren't to 2019. So some funding helped us get through that. And it, it really allowed us, it allowed me to keep a team of engineers that were working on the product.
And, and we had a, how many, how many engineers at the time?
we only had like four people at the time, four engineers working on the product. And I had, I think maybe, you know, three, three kind of customer success and salespeople that we kept part-time to go into the trenches with our customers.
So keeping product development stronger in that time and like, you know, going into the crisis with our customers, it allowed us to, I mean, it really accelerated our impact on the industry. And then on the other side of the, pandemic, we've 5x our revenue since the bottom of the trough. We also didn't churn a lot during the pandemic, which I think was a major testament to the technology.
We went in with, let's call it 120 customers. And we came out with... Of those 120, we came out with a solid 100 of them. We didn't see much churn.
Where are you today, just total customer count?
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Chapter 3: What strategies helped Prism.fm grow its revenue during the pandemic?
You've managed dilution to the extent where you still own a nice chunk of business. I call it 30% to 50%, right? Something like that.
Yeah, I own a nice chunk. And back to your question, how do I think about it? It would be great to own a greater percentage of Prism, but this is the furthest I've taken a company. I own an asset that grows directly with how much I succeed. I'm in complete control of my most valuable asset. It's more than anything else. No co-founders.
What's that? No co-founders.
I had co-founders along the way that we've parted ways with, and mostly all in good grace.
Do you have to spend money to part ways? You have to buy them out? Or how'd that work?
A little bit of, it depends on the story. A couple of weeks spent money on, yeah. A couple of it was more like cordial and they bought their equity. So yeah.
Okay. Okay, cool. All right. Very cool. Talk to me about how you've grown. You've gone from 240. These are event venues buying your technology, correct? Not the artists?
Well, we now have event venues in the artist businesses as well using Prism. Tell me about that. Yeah, so like the overall pitch of Prism is, you know, the live music industry is this like connected ecosystem of people that are doing business to make concerts happen. You have the venues and the promoters who are putting on the events.
And then you have talent agencies who represent the artists and they're booking these. And they're essentially like... selling the bands to these venues and promoters. So we work with both sides of the ecosystem and that mostly helps with data transfer. Long story short, like it, if a promoter and a venue is both using Prism, there's a really enhanced kind of efficient show that gets planned.
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Chapter 4: What is the significance of profitability for Prism.fm?
Like I think like for me, there's a clear, like I'm, I'm conserving the equity that I have and, you know, saving it for the future. And, um, you know, there's a clear, like I see a clear runway right now to get the company, you know, to, uh, 15, 20 million in recurring revenue. And it's just my own kind of calculations and willingness to hold on.
How long will it take you to get to 15 run rate? You think the end of this year or what's going to take it end of next year?
Um, and the next year.
Yeah.
Yeah. That's impressive. That's the goal.
Can you do that with your current product?
The big thing in the horizon that's curious is if we can break into the payment space. That's like the new, you know.
Well, what's the analysis there? I mean, we have a lot of listeners that have SaaS that are thinking about like, should I add embedded finance? So like when you're thinking about, should we invest in developers to add a fintech product? And if so, what percent of the GMV can we take? Like, how are you modeling that? How are you thinking about it?
Well, I think every opportunity is different, but you know, for us, there's a question of like Prism, Prism is, I think we've kind of like earned the right to be involved in the payment because our customers, you know, the payment that would be, that we would be getting in front of is the, uh, the payment of the venue to the band. And how much of that do you already sit on?
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Chapter 5: How did Prism.fm achieve a $5 million Series A funding round?
The other question is, how much is that 800 million, you know, chopped up? If you think of a POS system at a bar, that's like a bunch of $5 to $10 payments. So for them to take 5%, it's like, whatever, let's call it a quarter to a dollar. So it's really easy for payments companies to take a bigger cut of a smaller transaction than a smaller cut of a bigger transaction, depending on the market.
So that's something that we're working through right now, but still... There's there's there's enough payments for it to be a very exciting opportunity for us.
And what's the team size today? How many full time?
We are at 20. Sorry, I'm like, trying to think 27. Yeah, 27.
And are you still using sort of an outsource engineering team? Or is that all in house at this point?
No, we've never had outsourced engineering. We've always been in-house. Oh, okay. How many engineers? We have, of that 27, I believe 17. Are you built all in Austin or are they're spread out? We're a little bit spread out. Our core team is in Austin and we have a few people in Detroit. And then we have some international engineers that are like full-time employees.
It's not like a dev shop situation.
Very cool. Very cool. We're rooting for you, man. Congratulations. Let's wrap up here with the famous five. Number one, your favorite book.
My favorite book of all time. Let's just go with The Alchemist. That's a good book.
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Chapter 6: What insights does the guest have on founder dilution and equity management?
I think I'm not going for the rollercoaster ride that everyone is. I think there's an amazing amount of noise in the signal of what AI is, but OpenAI has clearly done something very important and interesting, and we'll see where it goes in the future. But if it doesn't go anywhere besides what it's already done, it's extremely impressive.
Number three, what's your favorite online tool for building Prism?
My favorite online tool. Um, lately I've been doing a lot of marketing myself and using Camtasia, which is like a, a way to like chop up like, like live recordings.
Old school, man. Camtasia is old school. Wow. Okay. Number four, how many hours of sleep do you get every night? I get, I try to get nine. That's good. And still, uh, not married one kid. What? You're 34 now. Is that right?
Yeah, yeah. Yeah, I'm in a relationship, not married yet, but that could change in the future.
Any more kids or still?
I don't want to divulge anything on the podcast that I can't divulge, but there's things happening with the company and there's also things happening with my personal life.
That's very exciting. It's still one kiddo or you have more at this point?
uh uh just just one for now but once again you know you know you don't want to break baby news on the podcast that's for sure uh we want uh family first family first all right and matt how how old are you 34 yeah you had it right 34 yeah all right take us home here something you wish you were the same age so i know it's perfect take us home something you wish you knew when you were 20
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