SaaS Interviews with CEOs, Startups, Founders
How To Build App Worth $10m With 3 Million Users with Ida Tin of Clue EP 154
23 Feb 2016
Chapter 1: What is Clue and how does it support women's health?
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Chapter 2: How has Ida's diverse background influenced her entrepreneurial journey?
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Coming up tomorrow morning, guys, you're gonna hear from Vincent Harris. He started in his dorm room and now he is Rand Paul's internet army and is doing over 1.3 million in revenue. Okay, Top Tribe, good morning, good morning. You're gonna like my guest today. Her name is Ida Tannen. She's the co-founder and CEO of Clue, the world's fastest growing period tracking and fertility application.
Clue has more than 2 million active users in over 180 countries and is one of the most popular apps in the health and fitness category, not only in the US, but in Germany, France, Mexico, and many, many others. Many women love and trust Clue because it's accurate, fast, and easy to use.
Chapter 3: What strategies did Clue use to attract 3 million users?
Ida, are you ready to take us to the top? Sure. Okay. Let's jump in and get started. First off, what is Clue exactly? And then walk us through how you guys generate revenue. So we don't generate revenue. I think that's the first thing to say. Um, we have a lot of ideas of how we will generate revenue, but we have made the strategic choice to focus on growth for now.
Um, so the app is a very simple app.
Chapter 4: Why is Clue focusing on growth over immediate revenue generation?
It helps users keep track of their menstruational health. Um, which is not only your actual periods, but also your mood, your pains, sex drive, and many other things. It's very easy to use. You can put your data in there very fast and it gives you a good overview of what's going on in your body.
So you mentioned that you're not making any revenue right now, but I can hear a team in the background, which means you have costs. Did you guys raise capital? Yes, we have raised 10 million dollars to date from Union Square Ventures and other very good investors. So we are kind of a traditional, I guess, Silicon Valley tech startup that we're based in Berlin.
focusing on growth and um and providing a lot of user value as we go um and thinking that when we have um a big user base we can start figuring out how to monetize and as i said we have a lot of quite concrete ideas and how we think that could happen well i want to jump into some of those ideas but this is not your first run kind of into the entrepreneurial scene i know back in 1999 you were focused on kind of the crystal glass jewelry industry is that right
Chapter 5: How did Clue secure funding from investors?
Yeah, that's true. My very first startup was doing jewelry in London. And then since then I have had a motorcycle touring company. So I've done motorcycle tours all over the world and published a book and various other things. But this is my first high growth startup. So that's... Exciting and kind of a different breed, I'd say, from what I've done before.
Yeah, so you went from kind of jewelry design to motorcycles to fertility app. I don't know that I've ever had a guest on and I've had a lot of really smart people on that have had such kind of edge experiences. How do you decide what you're going to get involved in?
Chapter 6: What challenges did Ida face when transitioning from previous ventures to Clue?
So actually, there's a lot of parallels from the life I had on my motorcycle and doing the motorcycle tours to running this kind of startup. There's a lot of, say, you have to be quite courageous, I think, in many ways. And riding the motorcycle alone through the desert for two years definitely was a good training ground for doing what I'm doing now.
So though they seem very different, I feel I'm using a lot of my kind of core strength. Which is what? Which is what? I think it is living very well with unknowns and being ready to jump into the deep end and learning to swim as I go. I think learning fast is one of the things I'm good at because I'm always new in my job in some sense.
So to walk us through, why did you decide to stop the motorcycle stuff and start Hello Clue? And then let's dive deeper into Clue and some of the growth opportunities.
Chapter 7: What insights does Ida share about negotiating company valuations?
I was kind of coming towards the end of my twenties and I was really puzzled why nobody had come up with a modern and data-driven innovation to help women manage their reproductive health and family planning. I looked into a lot of patent databases because I thought, well, maybe there has been some great innovation that just hasn't made it to market.
But everything I found was about putting hormones into the body. And I thought, but hold on, if you know exactly where you are in your cycle, you can then use a condom those couple of days where you can get pregnant and not worry about it the rest of the time.
So it really started with me kind of having that need and then figuring out that many, many women have a similar need because only 30% of women in Europe and America is actually on hormonal birth control. So that was the starting point, trying to solve something that seemed like a really, really foundational and major issue for many, many women across the globe.
So how did you get your, again, you self-funded, well, you raised capital, I mean, but how did you get the initial money to build the app, design it, get it coded? Yeah. So first we started living very, very cheaply.
Chapter 8: What advice does Ida offer to young entrepreneurs about leveraging their age?
You know, get by with very little money for a while. And then we raised money from our network. So angel investors that put in a little bit of money. But I will say we founded the company five people. So we were basically out of money the day we founded the company.
So we went straight into fundraising mode and were successful in finding other angels that want to invest and those angels kind of grew and in the ticket sizes grew and they grew in their experience level and their kind of professionalism. Did you either just to be clear, how much did you raise when you five decided to start the company on day one? How much had you guys raised from angels?
50,000 euros. Okay. And those angels, was it a convertible note and you just kind of let the note roll so you could add on additional angels? Yes. Yes, it was exactly like that. And that went until we had raised, I'd say about a million euros maybe. And then we did our first... financing round, a priced round. And then we got some super angels on and the last angel put in a million euros.
So a pretty big angel. And then from there, we went to two VCs. When you did your first priced round at a pre-revenue company, help us understand how you negotiated valuation. Yeah, that's I mean, I think that's a tricky thing to do, no matter how much revenue or whatever you have. I mean, when you look at the tech community, that's, you know, valuations are not set by revenue. So
Yeah, I don't know. That's a negotiation. Why do you say that valuations aren't sent by revenue? I mean, you know, in the SaaS space, my last company, you know, when we were raising capital, I mean, there was a pretty baseline formula in terms of software as a service revenue, top line, multiply times the, you know, 12 months, multiply times like a 6 to 11x, like top line multiple. That's true.
But then some of the very big ones like, you know, LinkedIn or Facebook or Twitter or Instagram and all the other ones, you know, those valuations, I don't think you can say it's based on revenue. Well, so again, help us understand those conversations. When you were negotiating revenue, I mean, what metrics did you use to try and drive your valuation higher if that was your goal? Yeah, sure.
It was our goal.
Yeah.
Well, to be honest, you know, they'll say number, we'll say number, and you'll argue with all the things you can think of working with. And in the end, you end up some number. And is that number like a truth or an objective number? Definitely not. Well, how many users, this might be a better question. How many users did you have of the app when you did your Series A? Let's see.
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