SaaS Interviews with CEOs, Startups, Founders
Productivity App Hits $2500 MRR, Raising $1.5m on $10m Valuation
13 Oct 2021
Chapter 1: What is the productivity app Akiflow and who is its founder?
All right, so you have 15% burning to pay. You have 200 paid customers today, but what do they like pay on average? Are they all paying 15 bucks a month? The average is 13.5. 40% of our customers actually committed to the year-end plan. You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom.
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My guest today is Nuncio Martinello. He's building a tool called Akiflow. It's a productivity app. He started off as a coder, turned marketer, and managed the growth of iMwatch. He started building a smartwatch in 2010.
He then moved to India when he was 23 to start his own company, a software developer, and then expanded to Italy and started one of the fastest growing marketing agencies in the country. He managed the innovation department and the spin-offs like in food, e-sports, technology, and affiliates, and then founded Akiflo, which got funded by YC, then pivoted, and now here he is today.
Nuncio, are you ready to take us to the top? Sure. Thanks for having me, Nathan. So what was the original idea before you pivoted? We were building a common bar, similar to Spotlight, to control your web apps. So it was like Alfred, but it was much easier to connect, like Asana or Gmail, and you could just type Gmail, send an email, or Asana, create the task, and it would do it in a second.
But we found a much better opportunity and something more exciting in the new product, so we decided to do it. Your headline on the website says the productivity out for busy people. Tell me what you do today. Aki Flow is a productivity tool that consolidates all your to-dos from multiple platforms via API, like from email, Slack, Asana, and in the same place, in the same inbox.
It has a fast and very familiar interface, task and calendar, and we have a superhuman approach to manage and process your tasks, so mainly keyboard shortcuts. It's really fast and it's going pretty well. We launched three months ago and we started to charge users a month back and the first signs of traction are just great. How many customers now in the first 30 days?
We have around 200 paying customers, but consider that we charge a premium and it's really an MVP. We have no mobile apps. We don't have a web version. You have to download an app. So we're pretty satisfied with the first results, especially in terms of the validation from the market that we're onto something here. Nunzio, how did you convert 200 into paid?
Did you have a big wait list or something? And if so, how did you use the wait list to get your first paid customers? No, we use the waitlist trick on the previous version. This time I just wanted people to use it and try and get feedback. So we gave everyone two months free trial after the product launch. We actually reduce it to two weeks right now.
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Chapter 2: What was the original concept of Akiflow before the pivot?
There was an opportunity in this field. I think there was no one really focusing on consolidating tasks, which is something that is necessary considering the new workspace, which is very busy and it's getting even worse now that there is COVID and every company had to install some apps to collaborate online.
And the main reason why we also choose this is that it really focuses on fundamentals of productivity, like it makes you faster in capturing and consolidating information and processing them and visualizing them. So compared to other tools that focus a lot on how you visualize information, we really focus on making you faster than whatever the methodology you want to apply on top of it.
And can you quantify that? All right, so you have 15% recurring to pay. You have 200 paid customers today. But what do they pay on average? Are they all paying $15 a month? The average is $13.5. 40% of our customers actually committed to the yearly plan. So you have about 200 customers at $14 a month. Many of them paid annual upfront, but it's about $2,800 a month in true MRR, correct?
It's around $2.5, yeah. Yeah. Okay. Got it. So you're doing, you know, I'll call it 30, 35,000 bucks in ARR right now. How do you like grow faster, right? How do you get your next 2000 customers?
Um, I mean, we, we keep, um, we keep getting users from word of mouth, which is pretty good, but of course we know we were gonna start to put some team features in, in the product, uh, uh, hopefully real soon. Tell me about the team today. How many folks you have working on this? We have two coders and out of four of us working on marketing and product and design. So it's six of us in total.
Got it. Six total, two engineers, the rest are product design, customer interviews, things like that. Yeah. And do you guys have enough runway to sort of keep testing here from the 125,000 you raised back in 2019? Yeah, we raised a little bit more from angels and we can go on for almost two years, but we plan to raise a seed round this month. Oh, I see. How much do you plan to raise?
What are you targeting? $1.5 million. That would be enough for us to get to a round eight. And why is that the right number? It's always tricky to come up with how much you want to raise. Why 1.5?
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Chapter 3: How does Akiflow consolidate tasks from different platforms?
I calculated how much I want to spend on the ideal team to build all the features that we have in mind, and especially to keep talking to customers and get data from them. And I consider that we are actually charging, so we also make a bit of money. So that would be enough to get us to have a bunch of team features and more virality, like a higher virality coefficient to...
to get a lot of users and raise more. And Nunzio, have you thought about what valuation you would target? You're talking like 5 million pre-money, 10 million pre-money, something else? We're raising at 10 million post-money right now. 10 post, okay. And what is the likelihood you think you get that valuation? Are you getting inbound interest? Sorry, Nathan. I lost the last question.
What do you think the likelihood is that you were able to raise that valuation? Are you getting inbound interest? Yeah. Well, we already raised 150K at this valuation. And we have a few people and funds who are pretty interested in investing. So we'll talk to them. And ignoring this current amount, how much have you already raised? Just YC.
125 000 from yc yep got it and that i forget what their model is they what would they take for that seven percent ten percent they take seven percent okay got it so seven percent now are they participating in the 1.5 million dollar round Um, no, this is still our seed round.
So they, if they participate in YC though, like any investor coming in is going to see that you have like that you went through YC and it's a negative signal. If YC is not in this current round, making it really hard for you to raise more capital. If YC doesn't invest, how do you deal with that? No, it's not happening in this case because basically we did not do a round after YC.
So usually YC, they invest and then you raise capital on your seed round without YC. And the YC will come in at the A round if they decide to invest. Well, there's a lot of companies where YC will, they will put money in right out of YC. And if you're not one of those like chosen companies, it's a negative signal to the marketplace.
I'm just, I know this because I've had friends that they've fallen into this sort of trap. I'm just, you're getting around that.
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Chapter 4: What metrics indicate Akiflow's early traction and customer engagement?
um well to be honest there may be very like a lot of reason why yc doesn't decide to continue like they don't invest in all the companies throughout the batch after the uh the pre-seed so um It's just about like we are in a very tough market and it's a very crowded space and a lot of investors have already invested in similar companies.
I don't think that's necessarily a very bad signal, not in our case, but we haven't approached YC for specifically this round because for us, it's right after demo day, basically. You're saying you're not approaching YC because you're way past demo day at this point and you're doing your own thing. Yeah, usually YC, they bring you to demo day and then you close your seed round.
That's what happens usually. And we aren't close to closing our seed round yet. So the more our seed round gets filled in, then of course we'll have a chat with our partners. Well, that was two years ago, though. The demo day was back in 2019. You're raising now. was last year, actually. That was 2020. 12 months back, yeah.
The point I'm trying to bring up, though, is a lot of people go, I want to get into YC, I want to get into YC, but they don't realize the negative, the very real negative signaling risk, where if you leave YC and you do not raise on demo day, there's like a black mark on you effectively, right? And so it sounds like you're not feeling that, though. Um, no, I'm not really feeling that.
Like what happened is we did demo day with a different product. We figured it out. It wasn't the right thing to build. We stopped fundraising for a seat round because it made no sense at that point. We went back into, into building. And right now we feel we have a product.
uh that can raise a seed round uh i guess ideally this stage would have been uh 12 months ago if we started to build this product during yc but that didn't happen and yes we we were for 12 months with no apparent progress on on that product actually so it's it's a new thing it's like we feel like we're just out of the model in terms of maturity of of our product and the state so it's
I think it's just fine. All our investors also, people who gave us money or even YC, they were all fine with us pivoting and not wasting their money on something that we didn't think it could have worked and turning into this new product. And now we have nice metrics. I think we can prove there's an opportunity over here and we're building something valuable.
So no, I don't see any problem with that. Nunzio, how much equity do you still own in the business? Me and my co-founders? Yeah. We just gave 7% to YC and then we raised $1.150K at $10 million cap. So still most of it. Got it. So you guys own what? About 91% YC owns 7% and then other investors own like 1% or 2%? Yes.
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Chapter 5: What strategies helped convert users to paid customers?
Got it. And are you guys, I guess, do you think about like setting up an employee stock option pool to do your key employees on any equity or no? Yeah, definitely. That's the plan. Yeah. We still haven't thought about it. We're very close. I've worked before with all my employees right now.
They all know as soon as we raise a seed round, I'll start to talk to our lawyers to figure out how to set it up. I'm glad of the team I have right now. They're all very smart and skilled people. And we have been knowing each other for a long time. So as soon as we get around to go forward, we'll set up the option pool. Cool. Let's end here with your product launch. It was very successful.
Number three product of the week back last year in August. You got 100,000 upvotes. Walk me through a couple of things. Like, why was it successful? I'm sure you hustled on the back end. So for other people watching on product, what can they learn from you? And then how many leads did you get from that? We got a few thousand downloads from Product Hunt. It was a good journey.
Actually, we had a very successful Product Hunt as well on the previous product, so we learned something from that. It's a long process, man, like 90% of the work is done in the four weeks before. So we started to engage. We engaged in a lot of communities. We started to talk to other founders. We tried to leverage all the possible contacts that we had to get more exposure.
And that's it, actually. To be honest, there's not many tricks. So people can learn from it, right? So name one community you engaged that helped you get more upvotes on launch day. Of communities, you mean? Yeah, you just said one of the ways you had a successful launch is you engaged communities. Can you name a community you engaged with?
Yes, we engaged with the productivity community on Reddit, for example. Okay. Individually with users. How big was your email list when you launched on product time? We had 6,000 people on our email list. And a lot of people, they actually subscribed to the previous product. So we sent all of them an email saying, listen, we pivoted. This is the new product. Take it out on product time.
How many website hits did you get that day? Do you remember? It was around 2,000, 3,000, but not the same day. It was both that day and the next day when we got in the newsletter as product of the day. And of that 3,000 hits that you got during Product Hunt launch week, how many actually gave you their email and signed up to try the tool? Around, I think, 30% of them.
so call it a thousand actual like email signups and then what about 150 of them converted to paid or 100 or so or what um yeah i guess of that of that batch it was around 100 of them um but consider that product times uh brings also to people they most of them they were actually not in target yeah so did a lot of them churn they're not active today
Yeah, a lot of them stopped using the product straight away. I remember after Product Hunt, we went to 400 active users. But we also made a little mistake of saying that it was a free version, which we actually kept for the Product Hunt users. So there are a bunch of people that are in the free legacy plan. Um, but yeah, I think, uh, uh, more than 25% of them actually converted to paid planning.
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