SaaS Interviews with CEOs, Startups, Founders
Retail SaaS Taking Off Post Pandemic, $1m+ ARR, Raising $8m Series A Now
19 Aug 2021
Chapter 1: What milestone did FindMine recently achieve?
So we have probably about 500 brands on our platform. Well, Michelle, if I'm doing my math correctly, you just passed an important milestone. Can I take eight customers times a $12,000 ARPU? That's 96 grand a year. You're north of a month. You're north of a million dollar run right at this point. Sure. Yeah, you can do that math. You are listening to Conversations with Nathan Latka.
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Hey folks, my guest today is Michelle Bacharach. She's a CEO and co-founder of FindMind, an award-winning content engine that uses machine learning to scale content creation for the world's top retailers. Michelle, you ready to take us to the top? Yeah, thanks for having me. All right, content creation is a tough space. Walk me through this. How'd you get into the industry?
Is it fashion and content for retailers exclusively? Yeah, retailers and brands currently across fashion, beauty, and home. Those are our first three categories. And I started the company because I felt like there was a big friction point for the consumer where consumers aren't experts in the product categories we're buying, whereas the companies we're buying from are experts.
And so there's a gap between how much of that expertise is actually reaching the consumer. And I found that that gap was really happening because merchants and marketers within these brands are trying to communicate their expertise, but they're stuck with kind of manual means of doing that.
So, you know, making an email campaign or a Instagram post or, you know, curating a landing page on the website. So what our approach is, is to use machine learning to kind of predict what that person is going to do within the organization, rather than predict what a customer is likely to do.
Because if we're predicting what the customer is likely to do, they're going to stay at that same level of expertise they've always had. Whereas if we predict what the brand expert is going to suggest, we're going to get that aspirational kind of brand imbued expertise. So what are these, what are these brands paying you for this technology on average per month?
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Chapter 2: How does FindMine utilize machine learning for content creation?
You can do that math. Was that accurate? Did you guys pass that earlier this year? We have passed that. Yep. That's exciting. Congratulations. Now, did you do a bootstrap or did you raise? We've raised financing. Yeah. We raised about $7 million lifetime to date. What was that broken down and how much did you raise in 2016, if any? In 2016, what did we do?
I think it was like an angel round of $100,000 plus some accelerator money. So we did an accelerator called XRC Labs and we got 50K from them. Do you recommend them? Have they been helpful? No. Yeah. So we were actually part of their first class ever and they've like completely, they were a startup themselves. They've completely grown, but they're, um, retail focused specifically.
And if, uh, if a company was trying to sell into that space, I a hundred percent recommend them. Wow. Okay. Got it. And then you raised more sense than what was the other rounds? So we did, um, like seed after that. And, um, yeah, so that was the balance of it. But, um, Oh, so you're just in the seed. The seed was a 7 million seed. Uh, yeah. Oh, wow. Okay. When was that? Pre-pandemic or post?
Pre, yeah. Pre, okay. All pre-pandemic, yeah. Wow. Okay. So what's sort of the next plan? I mean, once you're sort of on the VC flywheel, you have to sort of be raising every 18 months. In other words, it looks bad to the market. So are you raising now? Yeah, we're actually, you know, 2020 was not a good time to go out to the market, especially within retail.
But now it's a great time to go out to the market because retail has more than rebounded. I would say the whole industry has been pulled forward like 10 to 15 years. And we're just seeing like tons, we're getting tons of inbound from VCs who are like, we're really into e-commerce enablement, or we really want to focus on retail tech and That never happened before. Yeah.
I mean, that never happened before. People were sort of like retail tech, like that's not that sexy of a market. And now all of a sudden people are really excited about it. So what's the right amount for you to raise, do you think? So we're looking to do like an $8 million series A, you know, kind of right down the middle. We don't want to raise too much.
We've seen companies do that and not have great consequences, but we also have really like clear unit economics in terms of pipeline conversion ratios, how many account executives we need to achieve quotas and stuff like that. So it's pretty capital efficient. You can do a lot with a little. How many account executives are there today? You're looking at her. It's just me. Okay, you? Yeah. Yeah.
Many of you guys listening have built incredible SaaS tools to help other founders, specific industries really get value or make some system easier. The problem is you can't help your clients until they import some portion of their data. And you've considered on your Trello board and your Sprint timelines spending weeks building a CSV importer for certain data sets.
You're spying right now because you know I'm right. And either you do it and you waste engineering time or you don't do it and your customers have a horrible time getting onboarded. And listen, let's face the facts. Your ability to give value to your customers sometimes is very dependent on their ability to get you their data. Once you have the data, everything is really smooth.
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Chapter 3: What is FindMine's pricing structure and customer payment model?
Well, this exact problem probably explains why Flatfile is growing so quick. They've raised over $44 million and they do exactly this. The data onboarding platform for your marketing teams, your engineering teams, they enable you to get usable data faster so you can focus on what matters most to your business.
And the fastest growing companies like my friend ClickUp, Zeb, multi-billion dollar valuation, they all use Flatfile. Now flat file reached out. They wanted to sponsor. I said, you got a good deal for us. And they do for anyone listening, any, anyone that's part of the top entrepreneurs community or get Latka.
You can get a deal now to get started today at Nathan Latka.com forward slash flat file. And they make it so easy by the way, their onboarding is beautiful. 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. So how do you model your first sales hire that's not you?
Obviously, they're not going to perform as good as you. You're the founder. So we actually already went through that pre-COVID. And then because of COVID, we don't have a sales and marketing team since then. That's part of the way we cut burn and stuff to keep the lights on during the really challenging time of 2020.
But what's really good about that is we know all... We've been through the wall on the first sales hire, which is a big challenge. And... learned a lot. And so we have kind of our unit economics and like the ramp and the training assets and all that stuff kind of lined up. So I know exactly what that looks like.
And I know how many months to ramp, how many months to ramp is in the plan for a new sales rep? Four. Four. Okay. And when they are ramped, what do you expect them to hit quota wise? Million a year. And do you have like traditional full on target earnings, 200 grand, a hundred grand based on your grant commission? Yeah, it's 50% base, 50% commission, but commissions are uncapped. Oh, nice.
Yeah, so they could be like 25, 75 or whatever. Guy's the limit there. And how many total people on the team today? There's 12 full-time team members today, about 20-something if you include part-time and consultant. What about full-time engineers? Full-time engineers, four. Okay. Interesting. Nice mix here.
So, so looking raising now, obviously most folks, uh, well not obviously, but most series A folks are selling 10 to 20% of the business these days. Do you think that's probably what you're going to have to sell here? Yeah, I think so. I mean, I think that's pretty standard.
I've seen all the data, but, um, you know, I think I'm more interested in a partner than in the like specific amount within the bounds of kind of what's normal given up. Um, because VCs can make great connections, especially around hiring and customer base and stuff like that. So looking for some of the softer skills maybe as being more important in this next financing. Yeah.
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Chapter 4: What challenges did FindMine face during the pandemic?
everything was changing. Everything had to change. And I think our value proposition now to brands and retailers is like 10 times stronger than it was before COVID when it was just, you know, just getting you more revenue, right? That's nice. And it's, it was working, but now we have these additional levers to pull as well.
Well, we hope all those customers get addicted to those new lines and you come on in a year and tell us about the success again. But for now, Michelle, let's wrap up with the famous five, number one, favorite book. Ooh, um, quiet. I think the subtitle is how to succeed in a world that won't stop talking or the power of introverts in the world that won't stop talking.
Number two, is there a CEO you're following or studying? I like my peer group. I think that I learn more from them than I learned from Bezos or some of the big ones that don't feel as relatable anymore. So I have a CEO peer group. of like seeds and series A and series B companies that I connect with. Number three, what's your favorite online tool for building? Find mine. Oh, great question.
Um, I'm a big fan of Carta. They're probably my favorite. Favorite saves you a lot of time. Yeah. Number four, how many hours of sleep do you get every night? Nine. Okay. And situation married, single kids married with one child. He's 18 months. Oh, well, congratulations. That's so exciting. Can I ask how old you are? I'm 36 on Monday. Oh, happy early birthday. That's great. Thank you.
Take us home here. Last question. Something you wish you knew when you were 20. Um, nobody has it figured out. So my guess is as good as theirs. Guys, there you have it. FindMind.com, retail brand launched in 2016. Working now with eight brands, they do about $100,000 a month in revenue.
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Chapter 5: How has COVID-19 affected FindMine's revenue growth?
That's up significantly, about 40% from the beginning of the year as they come out of COVID. Much stronger. They raised $7 million today. Looking at doing a traditional series day now. I'll call it raising $8 million. We'll see what happens. But again, check out FindMind.com and check out Michelle. Again, predictive intelligence for merchants and markets to automate their catalog.
Michelle, thanks for taking us to the top. Thank you.