SaaS Interviews with CEOs, Startups, Founders
Pandemic should have killed him, he doubled revenue to $1.8m helping live event venues pay and manage talent
16 Jul 2022
Chapter 1: What is the main topic discussed in this episode?
Can I multiply that? I mean, can I take $600 a month times $240? That puts you at $150,000 a month in revenue.
Yeah, that's the way the math works. For political reasons, I won't confirm or deny that. But that sounds about right.
Yeah.
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 an entrepreneur, engineer, creator, artist, spiritual being out of Austin, Texas, now building Prism.fm. He helps make planning live music events easier. Matt, you ready to take us to the top? Absolutely. Thank you. I was worried about you during COVID. There was no live music events happening. How'd you survive?
We actually found the silver lining through the pandemic, for sure. It's amazing to say that now, in hindsight, there was definitely a moment in the heart of it where it was hard to see the other side of it, but our basic hypothesis the whole time was this was going to be a brief moment in time. There was going to be a live music industry on the other side of the pandemic.
And if we use this time extremely wisely, we can come out on the other side extremely strong. And I'm happy to say that that's what happened. We ended up emerging with twice as much revenue as we had.
We closed a series A. So you're over 1.2 million then now in ARR?
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Chapter 2: How did the pandemic impact your business and what silver linings did you find?
We actually just redid our pricing on the venue and the promoter side of the company. It's the most mature side of our product. So we're getting to a place where I'm really pleased and happy with our pricing model. What are they paying per month these days? It's all over the board. Our average comes in around 8K a month. But we have enterprise clients that are paying $250,000 a year.
We have some legacy customers that are still paying $2,000 a year. I mean, one of the cool things that happened is when we launched Prism, we were... getting beat up for a thousand dollars a year. Promoters were saying, hey, a thousand bucks a year, let's get that down to 800 bucks a year, 600 bucks a year. It was only on pure faith that I kept running the business in that moment.
But now we have a customer paying us over $250,000 a year and they're not alone. And that's a paradigm shift at the company. So, I mean, it's not like we've won the war. Um, but you know, that's very, very encouraging that start to have people pay us real money for our service.
Yeah. Very few founders make that gap, right. Going, I mean, we know it needs to happen at some point, but very few do it much less when they're going through COVID with what you were doing. Like, how did you have the confidence to with a straight face say, no, it's 250 K per year. That's the price and I'm not discounting it, pay it or go somewhere else.
Yeah. It, um, that's, There's a lot packed into that question. With that particular client, they launched a $100 million initiative. They raised $100 million to buy music venues and to create a tremendous organization. And very early on, they got in touch with us. They understood the value of software. They've tried to build out their own systems and they know how much it costs them.
Yeah.
So I think those were all very important factors. We didn't have to convince them of our value. And the price has gone up multiple times on them. And it's been rooted in software needs. So to be clear, they're not paying us as a consultant. They're paying us fees, SaaS fees. And we've been able to get them up over time based off of the features that we're pumping out.
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Chapter 3: What strategies did you implement to double your revenue during the pandemic?
So we get to a certain place where Prism's running a big chunk of their operation and they're saying, hey, there's this other bucket of our business. We're spending a lot of money on it. It would be really valuable for us if you could streamline it. And then we negotiate on the fees. So through that process, we've gotten it up to $250,000 a year.
And Matt, break down this for me, the revenue buckets. Of these three different folks you're selling to, what percent of revenue comes from which group?
By far. So venues and promoters, it's a little bit hard to distinguish because a lot of promoters are also venue owners. So it's really just two buckets. It's promoters and venues and agents. And the vast majority are promoters and venues.
Like more than 90% of your revenue?
Chapter 4: Did you pivot your business model while navigating the challenges of COVID-19?
Yeah. Yeah.
Oh, wow. Okay. And how many folks are paying over there? How many customers?
The agency market's six months old. So that's probably mostly why. I see. I see.
How many individual venues and promoters like customers do you have?
Um, somewhere around 240. Wow. Okay.
240. Interesting. That's great. And you said on average, they're paying like two grand a month.
Um, no, on average it's 7k a year ish.
Okay. Seven, seven K a year, 600 bucks a month, something like that. Yeah. Can I multiply that? I mean, can I take 600 bucks a month times two 40 that puts you at 150 grand a month in revenue?
Yeah, that's the way the math works. For political reasons, I won't confirm or deny that, but that sounds about right.
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Chapter 5: What new business lines did you introduce during the pandemic?
Okay. Got it. So you did a round in 2021 where you raised how much?
Yeah. In total, the round was $9 million.
Including the $2 million that converted in or no?
Yes. Yes.
Okay. So you raised $7 million of new capital, $2 million converted from 2019, and that's what you raised?
Yeah. Yeah. Yeah. It was actually closer to six and that too, it was the, the, the 2019 round was 2.9 million. And then there was interest on the note.
So yeah, I see. I see what interest pretty standard 68%.
We were 3.5% per year.
Oh, that's not, that's really good. That's great. Good negotiator.
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Chapter 6: How does your pricing model work for different customer segments?
You just called out our playbook right there for sure. We help them track their payments. We help them account for their payments. We help them invoice their payments. We're not actually facilitating it yet. So that would be a really tremendous line of revenue for us if we get into it.
I kind of always mess up this word, but I think the right word is it's low elasticity in the market, meaning they're extremely price sensitive. So sometimes a band might get paid $100,000 upfront if they're a big enough band or $500,000.
And we streamlined the problem of like keeping track of a huge mess around payments, but not a big enough problem to get like an ongoing 5% fee or something like that. Our clients would just go around us, if you will. So we're trying to figure out if it boils down to a few basis points, if it's just baked into their software subscription. And it's really just this thing that like,
locks, you know, locks in our ubiquity because we're also handling the payments and we get it back into fees. So it's an ongoing exploration, but you know, frankly, it's a bit of a horizon project for us.
We're fully focused on what I would say, like completing the initial mission and it'll never be complete, but our eyes are set on being the ubiquitous software solution for the live music industry. And I think in the next six months, we're going to see that happen.
Um, Matt, how much revenue do you send right now? If you track all the revenue going through your system today, how much is it annually right now?
If we track, if we, like all the payments across.
Yeah, yeah. Everything you sit on top of, all the payments you process.
It's in the billions. Yeah, I don't want to give you too specific of a number.
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Chapter 7: What factors contributed to your significant revenue growth?
Number four, how many hours of sleep do you get every night?
And I get a referral price for referral rock. So if anyone signs up for me, um, how many hours of sleep hours of sleep?
Yeah.
I go for seven to eight. Sleep is extremely important to me. I'm a big believer of, um, of, of doing the things, sleep, meditation, exercise. So that when I'm not, so that I'm, when I'm working, I can get that time back because my energy is just really that good. So I believe that health pays dividends and that's the model I follow.
I love that about you. Uh, number four, uh, situation, married, single kiddos, uh, one kid single.
Um, yeah, but I'm, you know, interested.
So he's still playing the drums or what? My kid. Yeah. I feel, I feel like you showed me a picture of him drum set.
He is really into drawing right now. He has submitted a bunch of ideas to Legos and Mattel for new toy ideas. So I'm really cultivating that passion of his, both like engineering and drawing is what he's into right now.
Oh, I love that. Okay, Matt, how old are you? 33. 33. Last question. Something you wish you knew when you were 20.
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