SaaS Interviews with CEOs, Startups, Founders
New Sleep App Hits 1.5m Downloads, $700k Revenue, 10,000 Paid Customers
24 Dec 2021
Chapter 1: What is the main goal of the Storybook app?
The plan is to get there with 700K. We right now are really, really busy working on the product. So we're looking in the long term of the business.
How much total, though, this year have you already done?
We're already past 500, close to 600,000.
You are listening to Conversations with Nathan Latka, 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.
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He's the husband and father of two boys. His family is his greatest treasure and his greatest project. He's building now a company called storybook-app.com to help parents make their kids fall asleep. Francisco, are you ready to take us to the top? Let's do it. Okay, so what's the model here? Are you selling directly to moms and dads or is there a B2B play?
Yeah, Storybook is a B2C platform. consumer subscription based app. It's free to download seven days trial and then you have a subscription to have all the content of the app.
Okay, interesting. And when did you guys get when did you launch the sort of the first line of code for the application?
So the MVP, we released it in May 2018 2018. But the but the fast growth, we saw it since January 2020.
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Chapter 2: How does the Storybook app's business model work?
Now we are seeing the benefits of it.
Francisco, how much did you spend on Facebook and Instagram ads last month?
Last month wasn't the typical month, but we are spending around 40K, 50K.
Per month. And so how much do you know you can, like, what does it cost you to get a new $90 download?
Depending on the country. So right now, for example, the price in Brazil, we are testing monthly plans, which is something we have nowhere in the world. In Latin America, the price is $50. In the UK, the price is 50 pounds. In the US, it's $89. So the average CAC, cost per acquired subscriber, it's around $40 to $60, depending on the country.
Okay. So 50 bucks, like in the US, you might spend 50 bucks to get a $90 download. So you're profitable. Well, you're profitable instantly because they pay it all up front, right?
Yeah. Well, we aim to do that.
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Chapter 3: When was the Storybook app launched and how has it evolved?
We aim to have a higher ARPU than our CAC. So the renewals come as an addition.
But it's all annual. So even if your ARPU, average revenue per user per month is... I mean, you're getting it all right back immediately. Now, have you raised capital here or have you bootstrapped?
Yeah, we raised our pre-seed round last year. We were lucky enough to cross roads with Jason Calacanis, amazing angel investor, probably one of the top five in the US, not the top three, at least. And he also was an early investor in Calm.com. And he fell in love with the business model because he knows about the subscription apps and how massive they can grow.
But he also understood the need of helping parents to get their kids to sleep because of a personal experience. So it was a great thing.
So how much did you raise around last year?
So it was around a million.
A million. Okay, got it. And what sort of cap or valuation did you raise that at?
We raised at $8 million.
Okay. Did that feel fair to you? Like looking back, was that the right call?
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Chapter 4: What revenue growth has the Storybook app experienced?
You don't have to commit to a bunch of stuff. You can actually see a demo live instantly right now. Check it out. Nathan Latka.com forward slash flat file. How many customers will download the app this year? Or how many, I guess, are on the annual recurring plans now today?
So right now we have 10,000 paying subscribers, active paying subscribers.
10,000 paid. So when you say active paying subscribers, does active mean they're part of that MAU number? Yeah. So I guess if you have 10,000... customers, how can you have 30,000 monthly active users, like triple the amount of your paid customers? Are there a bunch of free users in there? Yeah. Oh, I see. Got it.
It's a premium model, so you can use the app for free. But if you want to get access to all the content, you need to pay for a subscription.
I see. So 10,000 paid on the annual plans. How many total downloads does the app have all time?
All time. We are a little past 1.5 million.
Okay. 1.5 million. So you've converted 10,000 of those into paid.
Yeah. Well, remember that the business model changed, but yeah, ultimately that's what it is.
Yep. Yep. Interesting. Any other product lines? I mean, can you sell anything else to these 10,000 customers to increase ARPU?
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Chapter 5: How does the Storybook app acquire customers?
All right. So you guys are co-founders. You split it 50-50 at the start? Yep. Very cool. You didn't give her a little more. Let her have 51%. You take 49.
She deserves that. She deserves everything. Absolutely.
That's amazing. Okay. So you guys split 50-50. You sold 10% to Angel Investors. So it's sort of like 40-40-10 or 45-45-10, something like that right now.
Yeah. Well, yes. They were safe. So not equity as of now.
Yeah, yeah, yeah. But when they convert, it'll be somewhere around there. Yeah. I assume you're planning to raise it higher than the cap on the note, 8 million. Of course. Yeah. Yeah. Very cool. All right. So 20 folks on the team today. How many are engineers?
Our engineering team is five people.
Five people. Okay. And what do the rest do?
So the growth team and the product team take our bulk. We are 16 people full-time and four people half-time scattered across the world. We have people in Spain, in Colombia, in Argentina, in Ecuador, and one person in Australia. But the rest of the team is the product team and the growth team.
Of the $700,000 in revenue you'll do this year, do you have to give 30% of that back to Apple?
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Chapter 6: How much funding has the Storybook app raised and what are the future plans?
1.5 million total downloads, of which 10,000 have converted to a paid plan. It's parents who want to help their kids go to sleep faster. That quality time right as they're falling asleep. They raised $1 million at an $8 million cap, looking to raise maybe a $5 to $10 million Series A here. Soon, we'll see what happens. Francisco, thanks for taking us to the top.
Nathan, a pleasure. Thanks so much.