SaaS Interviews with CEOs, Startups, Founders
They were valued at $2.5m last month. This is their plan to make money with influencer list of 55,000
30 Aug 2022
Chapter 1: What is the main topic discussed in this episode?
10 brands spent 37,000 United States dollars through your platform over the past six months. Is that accurate? Yes. 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 gitlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, cap, valuation, or analytics domain, the easiest way to do that is to go to gitlatka.com and use our filtering tool. It's like a big Excel sheet for all these podcast interviews. Okay. So how do you help influencers market? Okay.
So, uh, actually, uh, firstly, like there are influencers out there which are not so popular, but their content is performing really well. So we are, uh, searching for those sort of influencer and then for the relevant kind of campaigns, which are coming out from brand, we are connecting them with the brands. Okay. So who's paying you to brand or the influencer? How do you make money?
Actually, most of the times we are making money from a brand side. We are taking a straightforward commission from their end. Okay. So there's no SaaS fee. It's only commission? That's a service charge, we call it. It's a straightforward service charge, which we are taking from a brand side for every collaboration, which they do with influencer. Okay.
So what is the average brand pay you per month in terms of the straight fee? Coming to state fee, that is 10% of the total campaign cost, whichever will come up after summing up all the costs for different, different influencers, which we will be selecting for a campaign. Okay. So I'm a brand, you know, let's just call it, I'm Pepsi, a Pepsi brand, a Coke brand, right?
And I want to find influencers. So Pepsi is going to come to you and say, I want to spend a million dollars this month, right? And when do you get 10% of a million? That again depends. If you are ready to spend a million dollars, rather than asking you 10% of the total campaign cost, I will probably ask you for a fixed commission on top of the whole campaign. Okay. I'm not following you.
The pricing model here seems a bit confusing. So I'm trying to ask questions to simplify it. If I want to spend a million dollars through your platform today, and you're going to help Pepsi go find 100 influencers to spend a million dollars on, how do you make money?
So most of the times, like whenever we are doing any influencer marketing campaign, we are trying to charge brands, which is something which is actually justifying. So every time we cannot charge for 10% commission because for every campaign, the kind of effort which we are putting as a company will be different. So maximum it will be 10%.
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Chapter 2: What is the revenue model for influencer marketing platforms?
That's it. How many brands paid you something last month? Last month, more than 10 brands which paid us because we recently started and we are also focusing on the tech side of it. There are a lot of problems there in this market and we are trying to solve it. I can briefly talk about those problems. Are you pre-revenue today or have you made money already? We are already making money.
We are making revenue. Okay, and when did you launch the company? What year? So the company was launched in September 2021. Okay, 2021. And have you guys bootstrapped today or raised capital? Okay, so initially we bootstrapped, but like this year, like initially itself, we like raised our receipt round. How much did you decide to raise? So we raised like 400K plus. Okay.
And why did you need that money to build this? Was just the engineering too expensive or what? The engineering is expensive, but at the same time, we wanted to bring something really good. So, and that we wanted to launch very quickly. So for that, we needed that money.
Chapter 3: How do you connect brands with lesser-known influencers?
So who is, we, how many are on the team today? Full-time. So the team is more than like 15 people. We are having more than 15 people as a full-timer. And then there are a lot of other consultants and part-timers who are working with us for different, different things. Like if you talk about marketing strategy and content script strategy, we are having people who are working as a part-timer.
And how many founders do you have Dharampal? Can you come again? How many founders are you the sole founder? Okay, so we have total three founders at this point of time. Okay. And how did you, you know, splitting equity at the beginning is always really tough. How did you guys decide to split equity at the beginning?
So initially we thought of going with a base equity that will be giving you this percentage initially and going ahead, whoever is going up and above the mark, we can allocate more equity to them. That was the discussion initially. Okay, well, that didn't answer my question. So what did you end up doing? Did you split it equally or did you do something different?
Okay, so first of all, like 50-50 doesn't work out because what happens if you see right down the line after one year, most of the times one co-founder will actually be leading a lot. Probably he will be having a thought process or maybe understanding of the same market 2x better than the other co-founder. So he should be benefited, right? Or he should be rewarded for that.
So just for inserting that, we initially divided the equity in a way that, hey, let's have these percentages as a base equity. And after that, whoever is creating more value, they can be given more equity. Got it.
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Chapter 4: What percentage do brands typically pay for influencer campaigns?
But are there two of you or three? You said split 50-50, but you started by saying there's three co-founders. So what is it? I said 50-50, which means 30-30 or 33-33%. Got it. So everyone got like 20% equally. So there's 60%. And you said at the end of a year, whoever's working the hardest, we'll give more equity to. Yes. I see. Okay.
And when you, and when you did the pre-seed raise, most folks are selling, you know, doing pre-seed raises, they're selling, you know, 15 to 20% of their companies. Is that sort of what you guys did? No, that we have taken another way. Actually, we have diluted not more than 15% actually. Oh, wow. So you sold 15. Okay. So that's good.
So you raised it like a 2 million pre-money valuation, something like that. Actually more than that, I would say. Okay. Well, if you sold 15%, 400 into 2 million would be 15%. Less than 15%. Oh, less. Okay. Got it. So higher than a 2 million valuation. Yes. Yes. Do you guys care about valuation right now, specifically your valuation?
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Again, both plural founderpath.com forward slash products forward slash valuations. Let's go back to the tool because that's what we started and I was confused, but now we know more about the business. So going back to the tool, again, you have 10 customers paying you today. On average, what a customer, like what did you make per customer last month? So it actually depends.
If you talk about the customer, there are customers who are paying us 50 lakhs for a campaign. There are customers who are paying less than that. Like the ticket size that start from 50K to 50 lakhs. And here, like, if you talk about what we are able to make in 50K ticket size, we are able to make 5K out of it.
And then if you talk about the bigger ticket size there, sometimes we are not charging 10% straight away. We are charging some fixed amount of commission. Okay. Dharamwal, this is very confusing. How much total campaign volume in dollars, US dollars, did you process last month? So in US dollar, I'll just have to convert it. From rupees or lakhs or what? Yes, from rupees to dollars.
So that will give me a fair idea. Well, what is it in rupees? I can do the conversion. So that will be somewhere close to 37K dollar. That's what we did last month. Okay, so 10 brands spent $37,000 through your platform last month. In the last six months, actually. Okay, Dharampal. So 10 brands spent $37,000 United States dollars through your platform over the past six months. Is that accurate?
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Chapter 5: What challenges do you face in influencer marketing?
So there are 55K influencers who have worked with us for any sort of campaign. That could be like barter also. Sometimes they are not making money. They are getting some- Okay, but that was my question, Dharampal. I said, how many influencers made some money on the platform? And you said 55,000. So that's why I'm confused. No, I just had to check into that number, look into that number.
I'm not very sure about it, but yeah, that I can, I give you that 55 K influences have worked with us for any sort of campaign. Okay. Got it. That wasn't my question. That's why you confused me. Okay. So that's why we were on different pages.
My, the reason I asked this question is I know a lot of influencer marketing companies where it's a marketplace like this, that you can sign up influencers all day long, but if you don't help them make money, they're going to leave. That's why I asked this question. Actually, initially that happened to us also currently like, uh,
As of now, we are having more than 68K influencers, and we are also having another data set of 40K. So total, somewhere close to 1 lakh plus influencer database we have. I don't care about the database. I care about influencers that are making a living on your platform. So actually, we are a small team, and this is what we have done so far. We'll be definitely scaling that up.
Yeah, but Dharampal, why do you care? Why do you care about how many influencers total have signed up? If none of them are making any money on the platform, it doesn't matter how many signed up. They're not activated. That's very much true that if they're not making money, number of signups or number of influencers are not going to be helping us. That's totally true.
So why don't you know that number? I mean, I asked you the question, you said you don't know it. Isn't that the number one most important metric for you is how many influencers have made money on the platform, but you don't know the answer to that? Actually, you said like so far, right? So from last two months, I'm not having the track of it. I can probably send you that number.
That's my question. Isn't that the number one thing? Shouldn't you know? Don't you check that every morning? I should be knowing that. Okay. Fair enough. Okay. Makes sense. Cool. Okay. So you're doing $37,000 last six months. You've raised some capital to scale. You're 15 full-time. Look, we're rooting for you. You're in a very tough space though. So we'll see what happens.
In the meantime, though, let's wrap up here with the famous five. Number one, favorite business book. Favorite business book. So that was Rich Dad and Poor Dad. I liked it a lot and that got a lot of motivation. Number two, is there a CEO you're following or studying? So currently there are many CEOs whom I am following at this point of time, but Elon Musk is everyone's favorite.
Number three, what's your favorite online tool for building UpGrid? Favorite online tool? So there are multiple tools which I've been using for building UpGrid. What's your favorite online tool? Pick one. Google Docs, I would say. Google Docs. Number four, how many hours of sleep do you get every night? I think six hours. Six. Okay, very good. And what's your situation, Dharpal?
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Chapter 6: How did you determine the equity split among co-founders?
I should have started earlier. That's how I feel. Guys, start your company earlier. Upcred.ai launched about a year and a half ago. They've got 55,000 influencers signed up. They've helped 10 brands process $37,000 in ad volume through their platform. They're hoping to make money based off a commission on ad spend they process and also help influencers make a living on their platform.
We'll see what happens. Three co-founders split equity evenly at the start. 15 full-time on the team. $400,000 pre-seed raise at around north of a $2.5 million valuation. We'll see what Dharampal does next. Dharampal, thanks for taking us to the top. Thank you. Thank you so much.