SaaS Interviews with CEOs, Startups, Founders
Party.Space Makes $200k From One Customer, Hopin Challenger Next?
09 Jan 2021
Chapter 1: What is the main topic discussed in this episode?
At the moment, we haven't released the product for Mesos yet, and we don't have any subscriptions yet, despite some clients already asking us to provide them with such an option. You are listening to Conversations with Nathan Latka. Now, if you're hearing this, it means you're not currently on our subscriber feed. To subscribe, go to getlatka.com.
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Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker 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. If you'd like to subscribe, go to getlatka.com.
There, you'll find a private RSS feed that you can add to your favorite podcast listening tool, along with other subscriber-only content. Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello, everyone. My guest today is Yurly Filipchuk.
He is the founder and CEO of a company called Party Space. He's an ex-finance bro, four years in VC and private equity with tech-focused investment firm CYFRD, and he's keen on hustle, culture, and B2B SaaS. Yur, are you ready to take us to the top? Yes, here I am. Okay. So the link, if you want to follow along, is party.space. What's the company doing? How do you make money?
So we have started from virtual parties, and now we fuel the data-driven corporate culture for remote teams. Okay. And so how do you do it? Are they paying a subscription fee as a consulting business? At the moment, we haven't released the product for Mesos yet, and we don't have any subscriptions yet, despite some clients already asking us to provide them with such an option.
So what we do, we ran and hosted a number of parties. Some of them were on our basic products and some were on something completely unbelievably cool. And I'm going to tell a little bit more about that. So just to be clear, you're pre-revenue today. You're planning to launch here in January of 2021, like this month. Is that accurate? Yeah, January, February, we're going to have a release.
But we have already earned something in 2020, something like 200k. Okay, and what did you make that money from? So we ran one of events for tech companies. Oh, so tech companies hire you to run events and you're their events team? So we host their events on our web platform. Sometimes we partner up with event agencies for bigger events. Sometimes we host them solely.
How many customers paid you something in the past 12 months? Probably around 25. Okay, around 25. So they each pay you sort of $8,000 or $9,000 a year or per event? No, no, no. The distribution is not that... So we have one big client paid us almost 200,000 euros for one-off event. And we have a very bigger number of smaller events for $300 each. What are you waiting for?
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Chapter 2: What is Party.Space and what services do they offer?
Virtual events for corporates, in this case, it consisted of main show, group communication for teams, and group games. And we saw that a vast majority of people participated in almost all activities, all games. And some people even communicated to more than 100 people during the event. How many employees from this big tech company showed up for the event? So it was a set of three events.
And in total, it was like three and a half thousand people. Oh, wow. Which tech company was it? I cannot say it right now. Okay. Maybe when the time of the interview is going to be alive, we will be allowed to tell this in public. So right now, if I go to your page, pricing, it says request a custom quote. I guess you're probably experimenting with this right now.
When you do release pricing, what do you think you'll price this at? I was truly amazed, but I saw that for our 3D project, companies are ready to pay $100 per visitor for one event. So when you're in Amazon and you would like to throw an end-of-year party for your employees, you can budget that much.
So you think you're going to cater really to internal team events, not like out Coachella, these sorts of things? Uh, yes. And the idea behind that is when you let people who know each other to meet online, uh, level of engagement, level of satisfaction is going to be much higher because those are your colleagues and that's a corporate culture.
How much money Yuri did you guys spend on building the MVP? Uh, So MVP was built from scratch for zero. And in this year, so we were almost in a break-even situation taking into account this client. Okay. And what revenue do you think you'll do next year? Oh, I hope I'm targeting for hoping like traction next year.
So Hopin just crossed a $20 million run rate up from about a million dollar run rate 18 months ago. You think you can break 20 million in revenue next year up from basically nothing this year? Yes, we can do that. So we are in a dire situation, like when we go not from the bottom down to corporates, but from the top. And the list of companies that are looking for our solution is now amazes me.
How many leads do you have currently? So currently, we have like, so if you combine our 2G and 3G products, it's around 30 really good qualified leads. What do you consider qualified lead more than how many employees? Yeah, so for us, Qualified Lead is a client that can potentially buy the subscription. So one of events are not sexy. The sexiest part is providing a subscription.
And for subscription, we are developing a set of like smaller products that human resources, people experience, culture team gonna use to engage employees. And those are like games, quizzes, uh, onboarding tools, uh, instruments to manage, uh, alumni. And what's the cost of the subscription?
Uh, so we are now in price discovery for subscription and, uh, I hope we can end up on $20 per employee, but, uh, $10 now seems to me. And how many employees do you want companies to have in order to like talk to you at all, where you can think you can add value? Uh, so, uh, Our current pipeline should give us like 300K in IRR.
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Chapter 3: How did Party.Space generate $200,000 in revenue?
Two funds already made the virtual happy hours. And I think we can add three more to the list. And what makes, I mean, this is like a cheap shot question, but I think it's an important thought exercise. I mean, do you feel like you have some advantage, some unique acquisition channel distribution that will allow you to beat Hopin?
In other words, if they just copy your code and it's just a game about distribution, can you beat them? So we don't compete with Hopin because Hopin is not providing corporate events. Yeah, but why can't they just hire five developers and build what you've built in three days? Because first, we have proprietary streaming tech.
Box solution was way too expensive for us, so we have decided to make it from scratch. And it came out to be flexible enough to fit the needs of event organizers. Because when it's a conference, everything is very plain and simple. But when it's a 3D venue, a nightclub built in virtual space, you need to really make it creative. Otherwise, it's going to be boring. Okay, makes sense.
Well, listen, we're rooting for you. That's for sure. Let's wrap up here with the famous five. Number one, what's your favorite business book? Okay, Sun Tzu, Art of War. Number two, is there a CEO you're following or studying? Right now I'm looking for HR blogs and like GitLab is doing probably the best job on the human resources.
Number three, what's your favorite online tool for building the business? Prospecting. What's your phone? Prospecting. I haven't heard of it yet. Prospecting. Okay. Number four, how many hours of sleep do you get every night? I sleep eight hours. And what's your situation, Yuri? Married, single, kids? Single, a little bit fundraising, and fully committed.
All right, so no kids, and how old are you? 28. 28. Last question. What's something you wish you knew when you were 20? I wish everything stays the same. It's not something you want to change, just a piece of information you wish you knew. Uh... Probably I wish I knew more on Bitcoin, but that's very cheap shot. Guys, there you have it. Party.space, a corporate version of Hopin.
That sounds like a lot more fun. They bootstrapped with sweat equity. Three founders own about 30% each. They raised $160,000 in Angel, did $200,000 in revenue this year. All sort of a custom deal, but they're moving into peer subscription.
Next year, as they look to scale, I have 30 corporations on their lead list looking to charge, you know, thousands and thousands of dollars per seat for these events, charging on a per attended seat model. We'll see if they can scale. Thanks so much, Yuri, for taking us to the top. Thank you, Nathan. Thank you.
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