SaaS Interviews with CEOs, Startups, Founders
POS System Does $15m GMV, Biz Makes 1%, $1m+ Run Rate Serving 150 Customers
06 Feb 2022
Chapter 1: What revenue model does Revi use to serve small businesses?
Can I multiply times that times $1,000 ARPU you're doing about $140,000 a month in revenue?
Yeah, somewhere in that neighborhood. Yeah, we're definitely over a million dollars a year in revenue.
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 is building Revi, a tool that you can use to increase revenue through purchase data and consumer relationships. Follow along at getrevi.com. Eugene, you ready to take us to the top? Yeah, absolutely. All right. So are you like a mini Zoom info or what?
No, we're like a POS on steroids. What we do is we facilitate transactions, but instead of just stopping at the facilitation of transactions, we leverage the data almost in an e-commerce style process to drive those customers back into this door to get them to spend more and essentially get customers to try out net new businesses.
Okay.
So I love getting from my local ice cream place, I'm going to make some vanilla and Oreo ice cream at a place called like Milk Cow. You're going to help them get my data. And then when they come out with their new spring flavor, they'll email market to me using Revy, something like that.
Something like that. The process would be a lot easier for the business because a lot of the businesses don't have the time to actually develop those campaigns. So our process would automatically do those campaigns for them.
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Chapter 2: How does Revi leverage data to enhance customer relationships?
Well, hold on. I'll come back to that in a second, but just to be clear, when you say it costs you 500 bucks, it pays back in three to four months. If you're taking 1%, that means you're saying on average, a new small business will do about 50,000 in transaction volume in the first three or four months. That's how you get your 500 back.
Pretty much.
Yep. I see. Okay. And just to be clear, so are you guys right now at the company buying that hardware or you said you're leasing it from somebody?
Yeah, so most of the hardware is off the shelf. It doesn't look like it because of the way we set it up, but it's mostly off the shelf. So we have some licensing deals with Apple. That's what we use for our screens. And then we have some specialized mounts that were built in China that we get shipped down. And so we just get a lease in company that can just lease all of that equipment up front.
I guess I don't understand what that means. So are you buying the mounts from China and the screens from Apple or you're leasing them?
We buy it, but the way the lease works is that you pay a certain amount per month. And then at the end of the lease, you get to pay a dollar and you buy off that particular lease or you decide to send it back and get a new one. So for us, that's kind of how it works. Send it back to the China manufacturer. And they'll send you back some new ones if you want to keep a lease going.
Almost think about like leasing a car, right? Like you have an option to buy it out or you could actually send it back and get a new one.
So when you take into account your 1% fee that you're taking from each transaction, about how much do you make per small business per month?
It could be anywhere between 500 and 3,000. It depends on the business and the volume, but it depends on the size of the business, but usually about 500 to 3,000.
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Chapter 3: What inspired Eugene Johnson to create Revi?
Would you still build loyalty programs and all these things? Or would you combine these things and make it similar to e-commerce and increase the customer lifetime value over time? And so what we believe is that the, the, the future of the world, the way the world looks like is going to have these things as a combined process.
Um, and it'll be way more efficient and way more, um, you know, revenue generating than, than your traditional model.
So you sell your first SMB on the new plan in 2019. How many are you at today? How many SMBs?
Yeah. So we've got about 145 restaurants on the platform today.
I love that. Can I multiply times that times a thousand dollar RPO you're doing about $140,000 a month in revenue.
Yeah, somewhere in that neighborhood. Yeah, we're definitely over a million dollars a year revenue.
That's great. Okay, so maybe more like 90,000 bucks a month, something like that?
Yeah, somewhere in that neighborhood.
Okay. And just so we can calculate growth rate, where were you about a year ago? Do you remember?
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Chapter 4: How much does it cost for small businesses to use Revi's technology?
that's a hundred percent. I grew up driving. Yep.
Yeah. Tell me about how you funded the business. You mentioned you raised.
Yeah. So, um, so we did, uh, I put in personally, I put in about a quarter of a million dollars and then we raised.
God damn. Eugene's got money. Where did Eugene get money? Did you have a successful exit before this?
Yeah. This is not my first company.
I see.
All right. Number four.
Now, was that in your head a little bit though? I mean, was that a meaningful amount of capital for you? Does it hurt if you lose all that money or no?
Oh yeah. Yeah. Of course it will hurt if we lost. So, um, so yeah, the first exit of, for my company wasn't huge. It was just, it was good enough for me to be an investor. You know, I got in early and come in like things like, you know, Bitcoin, I got in at like $200 a share and rip all these other things. So, um, Yeah.
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Chapter 5: What are the challenges of scaling a POS system business?
Okay. So seed round in 2019. And then would you consider the 2 million like your series A or no?
No, no. Seed round in 2020. 2019, we raised like a million dollar pre-seed. Just a million dollar pre-seed. And then prior to that, it was like friends and family.
I see. Most people when they're doing that seed round are selling 10 to 20% of the business. Were you sort of in that range?
Yeah, absolutely.
Okay. And did you own 100% before that? Are you still a founder?
No, I wasn't a sole founder. We had a couple of other... Well, they're part of the founding team. So I started the company and then over time, I started bringing people onto the founding team.
So can I ask how much you own today? Is it more than 50%?
Personally?
Yeah.
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