SaaS Interviews with CEOs, Startups, Founders
LightHousePE Hits $10k MRR Helping Brick and Mortar Keep Customers
04 Feb 2021
Chapter 1: What is LighthousePE and how does it help businesses?
So our initial raise, our bogey is a million. And, you know, the goal with that is to get from, you know, where we are today, which is about 10-ish KMRR to 80, to a million, you know, basically that to get to that hurdle for the Series A.
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Chapter 2: How did COVID impact customer engagement strategies?
We've got to grow faster. Minimum is 100% over the past several years. Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Lookers CEO Frank Behan before Google acquired his company for $2.6 billion.
We want to see a real pervasive data culture and then the rest flows behind that.
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Chapter 3: What pricing model does LighthousePE use for its services?
I grant 100% of those requests, no questions asked. Hello, everyone. My guest today is Andrew Steele. He's the CEO of Lighthouse PE, a location-based mobile behavioral engagement platform.
He previously co-founded and led three startups in healthcare and enterprise SaaS, and earlier led marketing, sales, and business development for high-growth businesses acquired by Comcast, Motorola, and Microsoft. Andrew, you ready to take us to the top?
All ready.
All right. So talk to us about Lighthouse. What does it mean when you say location-based mobile behavioral marketing, and what does COVID mean for that when no one's moving around?
Chapter 4: How did LighthousePE evolve from an agency to a standalone company?
Yeah, so two great questions. So Lighthouse PE is what we call a proximity engagement platform. And essentially what we do is we help businesses better engage their customers to increase their customer lifetime value and increase their customer retention. We do that. The proximity comes in in our use of things like location, real-time location data. That could be from geofencing.
It could be from beacons. combined with other things we may know about users from our customers' platforms like CRM, which we then analyze with our platform to engage based on the kinds of behavioral profiles that we can create from that data.
So relative to COVID, it's actually made what we do even more valuable to businesses because one of the biggest things, maybe the biggest thing that they're struggling with now is how do I get my customers to come back and how do I get my customers to come back more often?
And so by by communicating with them, by engaging with them using Lighthouse, you know, we're able to, you know, give them the ability to reach out on a very personalized level on almost one one to one level at scale, you know, to to create that comfort level to remind their customers that they're still.
Chapter 5: What challenges does LighthousePE face in its growth journey?
And Andrew, we we talk in McDonald's here or like mom and pop coffee shop in Scottsdale, Arizona.
It could really either be both. Our focus right now is on local and regional businesses. A lot of what we do, big global brands like McDonald's, like Burger King, Target, Best Buy, they're doing this kind of engagement today, but they're doing it with A lot of technology spend and a lot of marketing spend.
And so what we've built with Lighthouse PE is a platform that's very accessible and, you know, cost effective for cost effective.
What are these businesses paying on average per month to use you?
Yeah, so entry point's about 200 bucks a month and it scales up from there. We price based on a recurring tiered fee based on the size of their installed base of mobile apps. So everything we do from an engagement perspective is through their mobile apps.
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Chapter 6: What are the current metrics of LighthousePE's performance?
Consumers never see Lighthouse. We're projecting the brand of our customers.
I don't understand what that means. So a mom and pop shop will have their own mobile app
A lot of them do. And if they don't, we offer out templates that they can, you know, basically brand and skin and use in conjunction with with Lighthouse.
And so McDonald's will have I imagine McDonald's corporate has one mobile app and they funnel all the location data into that one thing. So you're only pricing based off that one mobile app.
We're pricing based on the install base of that app. So for example, if I'm a local beauty bar with three locations in town,
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Chapter 7: How does LighthousePE plan to scale and attract new customers?
I've got my mobile app. Maybe I have 10,000 users across those three locations. Or if I'm a 10-state regional franchise, maybe I've got a couple hundred thousand installed users. And so our pricing tiers based on that install base.
And when did you launch the business?
So the technology actually grew out of a marketing agency also here in Phoenix called Madison Ave., really as an answer to their clients' questions or issues that they're trying to resolve relative to retention. And so the technology was built as a part of the agency. But late last year, we made the strategic decision to start the process of standing up Lighthouse PE as its own company.
And that's a goal for us this year is to spin it out of the agency and really grow it like every other SaaS startup company.
Chapter 8: What insights did Andrew Steele share about his entrepreneurial journey?
Yeah, this is a very typical model agency to pure SaaS, but people get stuck sometimes in the middle. And the ways people get stuck is sometimes it's cap table questions. Who actually owns the spin out? Other times it's, you know, they don't want to give up the agency revenue. Sometimes it's a three, four, $5 million agencies, and they don't want to go in on the SaaS because then you lose agency.
Where are you stuck right now? And how do you plan to solve that stuckness?
Well, you know, the good news for me personally, I just joined the company back in last fall. And by that point, the agency had really created clarity around the objective with Lighthouse PE and the spin out. And so, you know, from where I sit, you know, we're not stuck relative to any of those things because we're spinning this out. And it's, you know, it's effectively been bootstrapped.
The cap table is going to be very, very clean. Who will be on it? Will you be on it? Yes, yes. And the agency will? The agency will, the team will, I will. And then as we raise outside funding, you know, those investors will be on the cap table from there. How much are you looking to raise? So our initial raise, our bogey is a million.
And, you know, the goal with that is to get from, you know, where we are today, which is about 10-ish K MRR to 80, to a million, you know, basically that to get to that hurdle for the Series A. And so, you know, we're, we're on our goal for the end of this quarter for one Q is, is to get to two 50 and we can point to about a third of that. So we're two 50 in ARR in ARR. Sorry. Yes.
Yep. Yep. That's great. And so when do you think you'll do the million dollar raise? Are you doing it now?
I haven't started it now. Current thinking is we'll start that in earnest towards the end of this quarter, early next quarter. I see.
And what do you think, let's say you get up to a quarter million dollar AR when you do start the fundraise, what valuation story will you go try and sell?
I think with that valuation story, raising here in the Phoenix market, somewhere in the six to eight pre range, if we're being really aggressive. As you know, valuations are lower here than they are in the Bay Area or in the Northeast. So that's sort of our realistic, I think, goal.
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