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Kind: captions Language: en [Music] so here’s the here’s the here’s the situation so this is recording so this is going to go live on our podcast feed so the people listening on the podcast there’s you and then there’s people who are live right now i think over a thousand people live so we’re on this thing called stonks.com i guess i got i got i got to do it to close disclosure i’m an investor sean are you an investor no fan fan so stocks.com it’s they uh we were friends with them they asked us to do this and it was actually we say no to everything but this was a cool idea so basically five startups are going to pitch us and we’re gonna maybe invest but very likely tear them apart and also complement them we’re gonna make like some good content out of this right yeah uh yeah okay great i’m down and we don’t know much about these startups ahead of time so it’s all gonna be kind of fresh and there’s a comment section do you see the comments section sean like where people are chatting yeah so like if there’s any good questions and also on the skype they can invest right like they can put in money yeah so like if they see something i i don’t think they can like they’re not literally gonna fund the company right there but they’re gonna say like i’m interested let’s talk and honestly that’s probably what i’m gonna do i’d never like on these things i know i cannot like i’ve seen these things and someone’s like i’m in for a hundred thousand dollars and they say they’re like right on the spot i’m not that impulsive are you uh yeah i’m that impulsive uh and it’s also more dramatic so i’m a sucker for the drama i’ll do it all right all right well at least one of us will um and then do you if you go to the chat of this video thing you’ll see the order of of people that they’re gonna go and um we’re gonna talk to one person i think they get two minutes and then we get eight minutes to talk to them and then it’s gonna say like time’s up move to the next one does that make sense this is pretty sick let’s do this all right uh we have john hancock uh from stonks is like our assistant here he’s going to be feeding a startup so john do you want to bring the first one up john is that a real name i don’t think so hey guys what’s up tarus how’s it going thank you so much for the time okay take it away awesome my name is darris i’m the founder and ceo of 5x um been fortunate enough to spend my career in the data space from being the first data engineer at salesforce the most recently running data for wework supporting thousands of employees over the last few years been super interested in the modern data stack it’s estimated that over 77 of companies in the next 10 years in some way shape or form are going to use the modern data stack the problem is that there’s a big disconnect in what vendors are selling today and what customers need over 90 of customers are investing in data to get a business roi yet the vendors are really focused on selling individual categories what this means is that customers have to have expertise they need to sign multiple contracts they need to stitch this together all of this is taking away from actually getting business output 5x is the first end-to-end data platform which is focused on business output so we license and integrate with the different vendors in the space and as an end result we can provide customers with an end-to-end platform depending on their use cases industry size budget on top of this we also have a services model where we can give companies access to high quality engineers who are pre-trained on the stack today we interview hundreds of engineers fully automated and we get to hide the top 0.1 percent end result customers can implement end-to-end data strategies in weeks instead of spending time signing all these contracts for less than a year old million dollar run rate on a poc with zero marketing and we’re super excited that we are going to be profitable by the end of this month all right uh good stuff um sam so uh what does this business do that’s what i’m i’m trying to i i was trying to interrupt you earlier but i think i was muted um i need can you kind of dumb this down for me for a little bit i’m looking at you so so let me for the listeners all right so the website is 5x dot co right now you are raising 300 000 at a 25 million valuation you got to a million dollars in arr in less than a year i don’t know what poc means when i see poc at people of color that’s what i thought about that point of contact okay so like uh some companies are telling you that they’re gonna pay you up to a million dollars right or collectively or they actually have they actually are paying us monthly and dude you got a million dollars at a proof of concept that sounds pretty sick to me okay but i’m gonna be honest i don’t know what the hell you do can you explain to me i’ve never worked at a big company before so i’m kind of like a big dumb idiot it’s not just for big companies think of you know if you want to get value from data fundamentally you need two things you need infrastructure you need tools infrastructure you might have heard of tableau or snowflake and the second thing you need is people now the way the infrastructure is working today is every vendor is really focused on one small part of the stack so if you want to do something like analytics you need to go sign four or five different vendors sign these upfront contracts and stitch this together yourself now if an industry is going to become mainstream then you can’t really expect ninety percent of customers who don’t know when you say words like vendors it’s it’s still hard for me understand give me a very specific example you used network format yeah you use the format that’s like um x x company had y problem yeah they tried z but the problem with z is this so then we came in and we do it differently instead sure so x company you know wants to figure out whether the customer name name yeah name sorry that was actually used one of our customers bank novo wants to figure out where the customers are coming from how do they personalize the app how do they save costs and you know optimize this sort of cash flow they now don’t know where to go they can go buy a single reporting tool like tableau but the end-to-end data strategy is a lot more comprehensive there’s a lot more than just having a dashboarding tool instead of having to hire multiple engineers instead of having to go sign all of these different tools and vendors they come to 5x 5x instantly gives them an end-to-end platform which has got all of these vendors we license these vendors and can give customers an end-to-end platform on top of this if bank if bank nova doesn’t have the resources to figure out how to go use it they can add uh engineers on our site who are pre-trained on the platform end result they’re getting business output in weeks whereas if they tried to go do this themselves it would be 12 times slower and six times more expensive all right that’s way better um and one question how on earth did you get people to spend a million dollars with you on a proof of concept because this sounds like a very hard thing to sell and a million dollars is a lot of money on and is it actually like they’re gonna pay you a certain amount of money every single year yeah so you know at the moment you know we so in the next two months our self-service platform will be live right so anyone will be able to go to 5x enter the credit card for a few hundred bucks a month you’ll have the you’ll have the you’ll have the platform so early stage companies can do this by spending very little money what we do today because the self-service platform isn’t ready we combine the a semi-automated platform plus a services model so you get engineers plus you get uh plus you get the platform so our average order value at this point is about 10k a month um multiply that by about 10 15 customers we’re at a million dollar plus fund rate which basically means you’re doing it by hand from now and then you’re uh raising money so you can automate it all correct it’s semi-automated already it would take a consultant about three or four months just to give you that platform they would go build it and they would start from scratch we do it in less than one day today that’s pretty semi-automated and where are these customers coming from so let’s dig into this 1 million of ar so you said you got 10k per customer roughly 10 15k um and roughly 10 customers that are paying you monthly right now um so you got 100k a month uh you know roughly roughly in revenue where did these customers come from is this inbound outbound do you have a growth strategy like do you have a strategy that would just lead you to the next 3 million also sure at the moment we’ve done zero marketing we’ve been really been focused on on the platform we have been producing content on my linkedin um on youtube mainly getting customers by word of mouth and by that so really the last eight months were early on using this to the proof of contra uh using this as a proof of concept this is not just a technology problem you have to convince all of the vendors in the space to give you api access to provision them integrate with them build for them um so you know you need it’s a little bit of a chicken and an egg problem where you need customers and at the same time you need to show these vendors that you that you they actually is traction and we become an added sales channel for them huh okay i uh what else sean uh i guess i’ll just give you a little bit of feedback on the pitch itself so um a couple things your house or wherever you’re at super nice um almost distractingly nice i kind of like my founders to be a little more uh scrappy than that just gonna put that out there where are you i’m in bali oh he’s in bali man it’s probably it’s probably not the most uh expensive place yeah yeah fair enough uh second thing um you know i think you wanna i think you tried to get the most information into the pitch whereas i think you kind of want to slow down and you need to just like work on that first 30 seconds to figure out the thing that i was confused about samus confused about most of the chat if you look on stonks was confused about which was i don’t really know what this does right when you say end to end that makes sense to you because you’re knee-deep in it but for us we’ve never heard of 5x before so we’re like end to end what and yeah you know all of the all of the words were quite um you know generic so like you know vendors blah blah and uh and so you what you want to do is basically just be able to to paint a picture so you know did you ever work at a company that had this problem or if you’ve ever been the marketing manager to company you know that you spend almost you know six months getting your analytics platform and then integrating it and then you have to get your crm and then integrate it then you have to do this and then integrate it and so it takes months just to get set up with the things you need to be able to see your business and every business has the same problem so what we do is we go to that person and we say hey use us and you get xyz right benefits out of this and people are choosing it because of this we got a million dollars in uh an ar already as a you know during our pilot just you know in a couple weeks or whatever it is now i’m kind of more engaged what else here and look this is actually quite easy what year did you join wework someone in the chat said this guy made a bunch of money off the wework ipo and then i just went to your website and it said you worked at wework so i don’t know what the truth is i joined in i think or 2017. uh i did not make money off the ipo that’s okay that’s irrelevant i i mean that would have been sick if you were it looks like you did because you’re in that nice house but um i guess what i was trying to get at is i would do exactly what sean said but i would use the wework story so we were at when i when i worked at we were because you were the head of data it looked like at wework or something like like some like pretty you led data for wework your bio says that sounds impressive it doesn’t matter if it is but it sounds like it and so i would use the story of like i led data at wework when we were this size and i grew the company to this size and a problem that we consistently had was blank blank blank and we solved it by hiring tons of people and it was still like riddled with heirs and and talking to other people in this data world i noticed they all had the same problem and so to bootstrap this company and get it off the ground i hired a couple friends and we actually have been doing this by hand and we convinced x y and z to give us some money and slowly or quickly we’ve actually automated a lot of it um and we’ve automated by doing x y and z so now all these companies who want to get this thing done they can actually use us and instead of hiring 30 people they just use have one person use this bit of software and it saves them x amount of money in x amount of time you know what i mean like i have by the way i’m just totally written i don’t know any of this is true no that was great but you know what i mean yeah totally um but now if we should just get to the product i think it sounds neat and it looks like my good friend ankur invested and he’s actually quite um he’s actually quite impressive as he knows his [ ] i think it’s a cool company yeah i would i would definitely just based off your traction alone i would want to learn more because okay uh you know a good pitch is not necessarily a good business but good traction is usually a good business and so you actually have good traction at a bad pitch that’s okay so i would want to learn more and uh and dig in to understand how much of this is a service and consulting business versus is this going to be software and this is going to be automated because it sounds like you’ve actually found a problem that people care about um we’ll see how how kind of durable that is and then we can go from there so um thanks for coming on man i think you know for both of us it seems like the answer is like we’d actually want to learn a little bit more and look at the deck before we uh we go too far amazing thank you thank you you’re awesome thanks for uh bringing brave and doing this so sean he um so on this stocks platform it says he’s got 75 000 of interest i do agree this potentially is more of a services play um but we actually just talked about that company worldwide technology and this sounds just like it doesn’t it yeah there’s there’s several companies that are like this uh there’s a lot of a lot of sas companies that have like a like either a consulting thing that’s how they get it embedded or it’s like just an ongoing revenue stream and it actually can get quite substantial so i don’t think that’s a complete um no i didn’t i didn’t think about that i didn’t mean that as a disc i kind of said it as like uh is this just this consulting company because if it was just a consulting company i would not do it but um but yeah i i was just so confused for half the time i didn’t really get to think about uh didn’t really get to think about the business to be honest i was trying to figure out what that does yeah that was a little bit of an error hopefully he’ll fix that but uh this type of business i think it’d be sick to own i don’t know if you if i don’t know why you’d want to raise money if you got a million dollars in just selling by the way the simple test here is uh like just say the first like 30 to 60 seconds of your pitch to somebody and then be like uh to a friend and just be like um hey can you play that back to me like so based on what i said what does my company do like and what you want to know is do they get it first of all like you have to get it and then are you interested in it does it sound compelling and if it’s like if you don’t get it it’s not compelling like don’t move forward don’t go to the rest of the pitch and you need a friend or you need like random people who are going to do that and the format you use was good because you you sort of like added the team and credibility well when i was leaving data for wework right you know uh all the shenanigans were going on but in my little corner of the world we actually had this much you know this big problem that we had to deal with and uh that’s where i kind of realized that every company has this issue that they can blank blank and it’s like oh yeah that’s a good format generically for a pitch yeah i agree um all right uh john hancock you want to send us the next one all right all right kenny you got it hey guys thanks for having me on the show so i am kenny i’m one of the co-founders of baccarat and we’ve built the world’s first online marketplace for group airfare and the problem that we set out to solve is that group airfare flights of 10 or more people traveling to together it’s sold offline so what does this mean say that you are a uh you’re organizing an 8th grade school trip and you’re flying 50 people from san francisco to orlando if you want to shop for uh for quotes you actually have to call the air call the airlines group desk over the phone and once you get something that you like well the offline nature of groups doesn’t end there it’s really important to note that group airfare is unlike booking a normal ticket so it actually takes place in five unique stages and that’s from shopping to deposit to final payments and make names list and before baccarat all of that happened over the phone so we thought in 2022 this is insane that a world with so much money in it uh operates totally offline so we created what’s like a b2b expedia-like marketplace for shopping for flights of 10 or more people in terms of traction we we did launch baccarat in october of 2021 we have really strong growth great unit economics and we’re actually profitable um as a business model we make between 10 and 15 margin on flights and from january to april we’ve done 4.2 million dollars worth of total sales we take about 1700 in revenue per per group and have 40 corporate customers that are using the platform today and one of the most exciting things that happened as a result of the pandemic is we got a ton of inbound from corporate meeting and team off sites that are looking to book group airfare it’s our fastest growing customer segment and it’s caused us to build out a bunch of tools to meet the needs of meeting planners and you’re probably asking why is uh why is this the team to bring group airfare from analog to digital well we have really deep uh domain expertise in group travel our ceo eric previously sold a tour operator business where he kind of learned the ropes of the business and then our team internally from the service side to the tech side we have a lot of deep expertise in travel tech and we think that we have a shot to be both the storefront and the underlying operating system for group airfare so we’d love to answer any questions that you have about our business are we live or can you hear us dude the top comment is actually pretty funny which it says fly together and brewflights.com is available uh go buy the domain yeah go buy the domain yeah get on that one you got the uh the stocks chat adding value here they’re the real value-add investor i love this also i like how you just like looked downstairs like ma go buy the domain wow the meatloaf yeah i thought you were like a chinese gambling website when you uh when you first came on i thought this is baccarat well based on your last podcast that wouldn’t be a bad idea too this is crazy fair enough let me ask a clarifying question on the pitch you said that you get 10 to 15 percent and i think your chart said did your chart say a hundred thousand a month in bookings or did it well your i forget what you but you you said four million did you believe attraction slide again yeah it was like four million between january and april does that mean that between january january and april you did four million but then yeah so we gmv correct we did yeah exactly so we’ve sold 4.2 million dollars worth of group airfare and we’re averaging about a hundred and fifty thousand dollars a month in revenue and that’s the revenue that like it’s real revenue and how old’s the business so we started in 2018 uh we survived the pandemic just barely um and then probably like half of our clients kind of uh didn’t make the pandemic so it’s kind of like a fresh restart for us um prior to us launching flight shopping we were just a trip management platform for tour operators so like if someone did like a lot of student travel sending people to like dc and orlando they would use our trip management platform just a way to stay organized and make sure that they don’t miss deposits and final balances uh and then we had a lot of time to ourselves during the pandemic so we made flight shopping because it was our number one request people don’t want to call the airlines for quotes and then how many people work there we have 11 now cool got it okay okay um so maybe in each of these sam when we do like uh first i kind of like clarifying questions slash like reaction to the business and then maybe some pitch feedback at the end of like how to get that better but like okay so reactions to the business and clarifying questions so um you are trying to do group travel uh for corporate and um and you said something at the beginning which was like it’s insane that there isn’t really a good solution for something with this much money in it i didn’t catch did you say how much is spent booking group travel every year yeah so i didn’t it’s about 130 billion dollars worth of just total group spend um and that equates to about five percent of an error line’s revenue so floating around about 225 million passengers fly as part of a group um pre-pandemic okay cool so five percent of airline rev airline revenue is done via these groups and that’s all kind of the over the phone or something like some other old-school method at the current currently exactly yep okay cool and then what’s the why now because people have been doing like travel startups forever uh like you know booking.com priceline these were i think booking.com person came out like in 1995 or something crazy like that yeah and so why has nobody tackled this part of it because i’ve seen travel startups in every angle but what is there anything that’s unlocked now or you’re just you finally have a great idea what’s going on here no so not finally have the great idea uh we do have some people that are competitors that sell a sas solution to airlines that allow airlines to make like a white label version of what of what what we do the why now is before the pandemic lufthansa american airline united is rumored to be working on it they want to go digital for their groups and they’ve actually instituted a private white label and so we see it happening in the same way that like single tickets came online we think groups will come online so the airlines are already starting to do the underlying tech and we think that’s amazing and we want to be basically that that second shelf that they sell their their their group airfare in how are you getting the customers now because isn’t travel like the hardest like uh when i think of like hardcore customer acquisition people i think of like online gambling i think of gaming and then like travel yeah like that seems like the most cut one of the most cutthroat industries to get customers because i think um the guys who started reddit started hit monk and uh it didn’t work out because they just like couldn’t get like or you know it wasn’t as big nearly as big as reddit how are you getting those customers yeah so currently right now about 99 of our business is b2b so we get customers really in two core ways uh one we have a referral pro of referral program so we are a we’re a preferred partner for like meeting planners and tour operators in the student travel space and if you refer us business we give you like five dollars per uh per per ticket book that has been enough to send us so much business that we have to like hire and raise money uh then the second way is kind of old school like industry events are still really popular just meeting with meeting planners and tour operators uh and then something that we’ll try to get better with um in time is like seo there’s not a lot of of competition for like the keywords group airfare before the pandemic we got it down to like 72 cents a click um but admittedly since we just survived and we didn’t have the capital to run a bunch of marketing experiments uh we’re not doing any paid at the moment and then until now you get a bunch of savages in the chat that are all going to start beating you up they already bought the domain fly together before you can get it so explain what are the terms of the raise so you’re raising how much at what valuation yeah so we would like to raise 1.5 million dollars at a 15 million cap great and so for somebody listen to the podcast there’s people who listen to podcasts that don’t uh they’re not part of like the angel investing scene how does a couple are you just 15 million dollars wait but you said you’re doing 150 000 a month in revenue so is it some revenue multiple just explain where’s this 15 million magic number come from for you yeah so um we have our customers book pretty far out so like our average customer books nine nine months out so through the end of the year we should make about 1.5 1.6 million dollars in revenue and so we just took that top line number and times it by 10 to kind of be safe no there’s been crazy stuff happening but we want to be set up for success and fair so we just times it by 10. and then what is the like what’s actually happening under the hood so you didn’t show like a demo or search engine or how somebody actually does this is there are there apis are you just like calling the airline yourself under the hood like what’s what’s actually happening yeah so under the hood we are connected with two are you familiar with like travel technology no okay so really high level i know that where time is running out so we’re connected to two gds’s called saber and amadeus that’s how we get the flight content and then we had to build some stuff on top to make sure that groups work because there’s limitations of the legacy system but i think our time is up and that could be a whole podcast let me ask one let me ask one more question um this is something that i love asking everyone that i invest in which is like 5 10 15 years down the line how does this how big how much revenue are you gonna be making and how am i gonna get my money back yeah i think that we can be both the store the the store front and the underlying pipes for groups so uh if you were thinking about getting like a ride you would open the uber app if you were thinking about booking flights of 10 or more i think that you come to back right.com but how do i and so how big do you think the business will get and what’s gonna happen someone’s gonna buy you for a billion dollars someone’s gonna buy you 100 million dollars you’re going to go public what do you think will happen there’s a there’s a really uh a really clear path for us that we get to like 50 million dollars in revenue in the next like five to six years um and beyond that i’m not totally sure but i the path to 50 is pretty clear that’s a good answer okay yeah that’s a great answer uh in general fantastic pitch actually the thing i was saying before gotta be clear gotta be compelling in the first minute you were extremely clear extremely compelling i think it’s pretty pretty clear you know your stuff uh as you were asked questions about it you had good honest answers you didn’t oversell but you um you got to the point on on each one of those questions so i think a really strong really strong pitch as far as i’m concerned yeah i would i i i’d love to learn more cool that was a good one it was very it was very very very very clear one thing that wasn’t clear which is like uh how big is this pro i mean i don’t know anything about group flights and it turns out so he said it’s like it it’s a hundred billion dollars worth of tickets booked a year as group flight is that what he said 130 billion of group spend which is five percent of all airline revenues what he said yeah he buried the lead on that one a little bit yeah exactly so like you know that question we asked that’s got to go to the front of his presentation which is like yeah booking group travel sucks and by the way this sounds like it might just be this fringe thing but there’s over 130 billion a year going through uh group group travel and today that’s all done still on the phone which is crazy because most of all other ticketing 98 other 80 of the other ticketing is just done online now yeah that’s going to happen for group travel and we’re going to make it happen right i would have been like all right so group travel is defined as 10 or more tickets guess how much revenue is booked per year doing that yeah guess how much revenue is a nice one a confidence b makes the other person insecure c they’re almost always going to guess wrong when you have a really high number because they just don’t have right the right framework you say 128 billion that’s 5 of all tickets are booked that way and guess how they book it they have to call the airline and book it all like manually it’s a pain in the butt like that’s how i would have done it but he did he did really good and i would put a screenshot of the website be like this is a you know if i go to like whatever delta or i go to expedia like look all the there’s a million buttons on the screen there’s not one if you want to find the group button go to help go to phone this is where you go for that this is where 130 billion flows through right like i really emphasize that problem and then i’d show my screen which is like a google search engine that’s like here’s how it works on fly together you just go here you just say how many people where you’re going and then we take care of the rest we do a bunch of crazy stuff under the hood to make that automated um and it’s working we have you know we’ve done 4 million in bookings so far that translated into 150 000 a month of revenue for us so we’re on a x mil you know 2 million run rate and uh by the end of the year blah blah blah dude i agree everything said one thing that what it bothered there’s two things that when startups when i’m talking to them that bothers me one is when they use arr and it’s not actually annually recurring revenue and they’re like well it means um at annual run rate i’m like dog come on you know like none of us like use that word that way and the second thing is when they say revenue but it’s gmv which stands for i don’t gross merchandise volume so it’s like if you’re ebay you sell technically like let’s say a hundred billion worth of stuff but ebay only captures five percent of that you know i’m making that up but like i i need it’s so confusing to me when they say that i wrote this note during the thing right like i have this little white board here i’m writing on i wrote revenue presented weirdly because he wrote 4.2 million in sales but it was like that’s an aggregate over five months then he wrote like uh we take 1.7 per customer it’s like dude just say how much revenue you have like make that the first one we do this much per month per year that’s our current run rate that’s that’s not gmv that’s what we take home in terms of gmv we’ve done this much right like that would be a big improvement over uh over the attraction side but very very cool company though you want to do another one mr hancock where yeah hello what’s up all good and uh thanks for doing that it’s actually really fascinating so my name is oren i’m the co-founder and ceo of munch and i’m accompanied by peter my co-founder and cto and we both have i have too many years of experience in business and tech leadership growers and we’ve been building much for the past few months getting out of the validation phase and into our mvp and initial attraction so what is munch think about your favorite youtuber apart from results let’s say this person has 1 million subscribers on youtube now what if i tell you that chances are that this person has almost all of other content professionals has only one to two successful distribution platforms i mean this is mostly the case in in almost all cases this is because it takes a lot of time money professional know-how to succeed on each and every social platform it’s actually pretty different to be successful on tiktok or facebook or instagram or youtube totally different platforms and different audiences due to that most of them don’t even try to to put it in that effort and kind of give up even though it can grow their revenue streams and their monetization potential quite quite in quite a reasonable numbers so we are a team of builders dreamers and coding curators on a mission to build the first platform that we serve as a home for content creating professionals there are no other platforms currently serving as a home as a place that the current profession can do everything from creating their their new content based on data driven processes repurposing the content for different types of platforms doing research on what’s the next next content that they want to create and actually distribute it on all platforms and monetize the content creation market is currently estimated at around 65 billion dollars with an annual growth rate of 15 this means that it will get to 140 billion dollars by 2026 and combine that with the creator economy we’re talking about 200 billion dollars market it’s a rather big market and we are currently raising five hundred thousand dollars on top of the nine hundred thousand dollars that we already raised we have 250 000 already committed and we’re looking for 250 more the idea is to take this money and use it to boost our dev team and create the first version of the product by this november increase of traction and start and start testing different pricing levels with their initial paying customers so we’re looking for some new partners that can actually teach us a bit more about the media business okay first of all let me say the people who are not english speaking and pitch [ ] awesome that would i cannot imagine how hard that it’s not easy it’s not easy i could tell it wasn’t easy it you did pretty good but uh golly that seems like a rough thing to have to learn how to do congratulations we can barely speak when it’s our native language so you know uh respect for that okay now i could be mean that was a horrible pitch though uh i respect the attempt but the actual structure of the pitch was just not great and uh like you know in the chat here on stonks on a scale of one to ten ten being that was super clear and compelling one being i was cloudy and not compelling give it a score one to ten i’m curious what it was for for you guys one being low not clearing compelling ten being very very clear and compelling type it in the chat and they’re on like a way they’re on like a 15 second delay by the way so i’m saying an eight and then two two three two one three one two one two one one one right okay so your job orin is to get that two into an eight right because like right now i can barely even give you kind of feedback on the business itself like i went to your website so i went to getmunch.com and it looks like basically what you’re doing is a creator spends a ton of time let’s say making a video or a long form post they’re kind of drained by the end of that and um and so they post it on the one platform they post on youtube you take that content you turn it into clips you put it on tiktok you take that content you turn it into tweets you you basically repurpose the conte chop it up and repurpose it so they can get more juice out of the content they made is that right this is the penetration product this is what we currently do we currently have online and we can actually if you want to see an example and i allow myself to take one of do your like to see that can you see that yes okay so um let’s take for example this episode okay it was from april 6th i kind of played around with it and what you have here is our system choosing between three to five the most engaging parts of the original video what do you mean by engaging we do analysis both on scenes and visuals and any different types of audio effects as well as analyze with using ai the actual spoken words in the in the video in order to understand what would be the best clips that can fit into let’s say a one minute tick tock or a three minute stick talk or one minute instagram reel so the idea is that you as a creator can get your original video chopped up into like you said into a few clips and then turn from landscape to portrait so we can publish it directly to the other uh to the other platform okay so this is go ahead yeah i’m i am human optimization sean have you ever heard of jelly smacked i’m shocked or you didn’t talk about them you’ve heard of jelly smack right i was waiting for you to raise their name yeah we heard about the tickets actually we love jelly smack we love what they’re doing and we love the fact that they’re doing all the market education for us talking to content creators about content repurposing it and the fact that you can be successful equally on all platforms but genius mac and again we really admire what they’re doing oh come on we really admire what they’re doing but they’ve been around for six and a half years and they have 500 customers and 2 000 employees manual labor is not really high-tech new kind of what we’re looking for using nlp and computer vision we can do what jlsmeg does fully automatic on a self-service basis and fully scalable this is a whole new level of content management and just to be clear we’re starting with content repurposing the idea is that we distribute the content for the content creator on their behalf on all platforms so we can take back the the analytics that we get from the platforms and then create a kind of a cockpit in which the content creator sees everything that is going on and can understand what exactly they need to focus on where is their niche what is the topic they need to talk more about and and kind of you know progress along the lines that every content piece can become 30 to 50 different types of common pieces that create more data that you can then analyze and then create the whole public loop so yeah this is the idea well i have a question really quick but what’s stopping this to me maybe there’s a world where this kind of becomes like the uh you know buffer buffer.com started just by like you would schedule like tweets to go out and then like everyone kind of offered that same thing and that feature became somewhat of a commodity is there a world where this this thing that you’ve built becomes a commodity and you actually have to offer more stuff like for example i don’t actually know if this is true because i don’t entirely know how they work but it seemed like jelly smack one of the ways they make money is they actually don’t charge the creator but they put ads on the creators videos and they take a cut and so it’s like the technology that they’re offering is just like a feature and the real value is that they are giving the creators more revenue by giving them an ad split and would be the money maker yeah yeah so is there a world where this technology you have really just becomes a commodity and you got to offer other stuff in order to keep people on yeah so the idea is is actually you know like drop shippers have shopify and marketers have spot content creditors will have munch and the idea behind that is that currently there is no platform like that there’s a lot of vacuum in this space and currently this vacuum has been filled by hundreds of thousands of freelancers on fiverr uproar and little to uh to medium agencies so this is something that people already consume but either they’re paying premium money for their services or they’re giving up like between and these are real numbers 30 to 50 percent of the revenue that has been generated by the agencies so yeah the idea is that it’s going to be the central platform for content creators the central copy they can use and in terms of the business model if this is what you’re asking so we have like two options and we’re currently we’re still preceded we still you know playing around experimenting with the business models we can do both things we can charge a premium fee for the premium features and there’s there’s a lot of things that we can charge for like you know creating taking your podcast and creating twitter threads for the next month that we can disable the right time or we can just use this inventory that is being created via munch and integrate brands into it and do brandees and get money from brands and pay the creators so we’re still not sure which business model will win right we experiment with both in the next few months but yeah it’s like um looks like a huge potential so so i would not be interested in investing in this business uh for a couple reasons but i would say like you know the main the main two is like i feel like it’s going to be based on how difficult it was to get us interested in the business i think you’re gonna creators are super busy uh a thousand opportunities coming at them at all times and it seems like you’re gonna have to really punch through the noise in order to be able to get there and i don’t really have confidence you’re gonna be able to do that that’s kind of the first piece uh second is like any time somebody’s using ai i’m like oh okay you know i gotta see it to believe it now what i will say is your pitch with the slides was putting me to sleep but the pitch where you showed my face i’m like oh wait this is me great you know so so i would i would definitely lead with the demo uh but and that’s not just for us because we create content a lot of people create content a lot of investors do but even if it wasn’t us hey this is a popular podcast blah blah blah so here it is it’s the one hour thing not everybody’s going to watch it today they pay you know editors and social media people thousands of dollars a month to go find good clips cut them out post them on tick tock post them on whatever because they know they’re leaving so much growth on the table if they don’t do it but with munch they’d either be able to do it themselves or they can hand this tool to their person so they can make ten times more clips um you know and and not have to hire as many people and so then you’re explaining you know the like your demo was the most impressive part of your thing where you’re like look long video push a button i get a properly formatted clip option and i have you know 10 of these that i can choose from and we’re trying to do this all automatically right so so i think that you can you can make your thing more compelling um if you kind of like work on how you explain it versus like it was all intellectual it was all theory based whereas you want it to be story based right so instead of saying you know content creators fa you know have complexity when it comes to managing multiple platforms that’s intellectual uh you want to make it a story which is like here’s these guys they do this stuff they record this three-hour thing the last thing they want to do is this or hey for your podcast right now we have a 5 000 clip contest running it’s like you’re paying five thousand dollars just for somebody to cut clips of your of your video into a tick tock what if i told you that i had a tool that would do that automatically for you and your producer could just go do this you know in 10 minutes after the thing they don’t have to re-watch the video they don’t have to do blank blank blank they have to resize it they don’t have to export it we’ve done all of that for you um and the best part is you know blank and so i think you can make this a lot more compelling but as it is right now i would not be interested in the business well thanks for the feedback um for that reasoning i’m out do we do the shark tank thing i don’t know yeah yeah yeah yeah thanks for the feedback and regarding customer acquisition actually this is exactly what we’re doing we we’re creating preemptively the videos for them and then we send them uh via an email marketing machine that currently has like a four to five percent conversion rate and a database of eight hundred hundred thousand creators on youtube and we’re using influencer marketing because it turns out after talking with more than 100 content creators the way that they learn about new tools and new platforms is by watching bigger influencers so we’re using influencers in order to get to more more customers it’s kind of neat because we just got to 2 000 users in less than two months so yeah it’s it’s kind of starting to grow cool sam anything else on your side the same question um that i that i asked the other folks and i don’t know why you guys aren’t doing it but paint the picture of like uh how’s this gonna make me wealthier you know like like i like get down to like my my primal ins my like my primal desire here of like i’m giving you money so how big is this going to get and how do you sell or go public and i get paid more than what i gave you uh you know like paint that picture for me yeah so why once we have 5 000 users paying users we’re gonna hit the one million dollar arr it’s an actual error because it’s a recurring revenue once you uh charge them on the monthly basis uh and there is a serious uh virality um and symptom in the area of content creation it’s kind of a plg because once you create content with munch we have our logo and some mention to munch on on the content the idea is that other creators are watching and getting into the game so it’s gonna a very very quick growth in terms of sizes current market is 65 billion dollars it’s gonna grow aggressively in the next few years so you know sky is the limit uh it’s going to be a unicorn it’s going to be a big company and this is what we’re aiming for good i appreciate you thank you very much thanks for coming thank you sir bye i uh sean man like what i was saying to him about the the english uh thing dude it is if you don’t speaking if you have an accent you are at such a legit like just in terms of logistics and understanding everything you are at such a disadvantage for these things it’s a really really hard thing to overcome and it’s i mean it’s cool that people uh overcome it but holy moly i would not want to be in that position it is tough right it is really hard and um and you know i feel like uh that’s why i think that the deck and the story i think need to be kind of like crafted well so that that can be the kind of like universal language that you’re working with as you as you go through this i like as an investor and even just like when i’m never trying to assess out anything i have to work extra hard to be like okay this person well like a lot of times we’re investing sometimes we’re investing just on charm all right this person is charming enough that i feel as though they’re they can convince other customers to buy or they can convince employees to join their company uh you know that’s like kind of like that adam wework guy thing and then there’s other times where i’m like okay but like what’s the idea here is the idea good and i have to kind of challenge myself to be like uh to like look beyond where they currently are because of maybe like a lack of it’s just hard to understand man that it makes a difference and and i have to like overcome that a little bit and i would say some of my best investments have come from very charismatic ceos and some of my absolute worst investments have come from charismatic ceos it cuts both ways by the way i can’t get into stocks it’s like dead for me um i had to refresh it as well and everyone in the chat is saying they had a refresher too yeah when i refreshed them let me know but all right uh either way that’s okay i don’t need that open we want to do another one i think one more or two more one more there’s allison nickel pass all right zaza sorry i don’t know who’s presenting all right that’s me okay guys how are you you guys can see my brain i think they can all right what’s going on uh name is zaza ceo and co-founder of nickel pass before this i was the head of international expansion at huffington post after that i was groomed to be the cro where i discovered we were not profitable we were the largest news site in the world outside of china and i didn’t know before i took the job that we actually hadn’t found a way to monetize the 200 million people coming to our websites globally i’m allison powell ceo and co-founder um part of this i was actually a banker for about 10 years and our way of sharing news and information on the team was to have my ea print out an article leave it on the center conference table and say please read and that’s certainly not a way of sharing news and information that scales when you’re working on remote teams distributed teams and asynchronous teams so nickel pass really solves for all of um and awesome i’ll just jump in one of the things that we’ve come up with is the what we call cocktail party pitch uh when we’re at a party people are like what does nickle pass do and what we say is you know how you get uh an article from a friend shared with you and you get that pop up that says pay for the full site well we invented a product where you never see that again and the way our business works is we sell it to enterprises which allows them to get up to 70 off of retail and we customize the past based on what each department and team and user needs to be successful so here’s the nickel pass i’m in front of a business insider paywall i click the button oops i don’t think there we go okay there we go through the paywall i hit a paywall i go to my nickel pass which is a chrome extension click on business insider and that’s it i never see a paywall again it looks like we’re having a little bit of who’s sharing what but you guys saw the product um a couple of things about the business so because of our background the chairman of the company is the former head of strategy at cnn uh we’ve been able to collect a network of over 200 publications including the la times uh crunchbase pro time magazine and we always like to point out that beer business daily is on here for a reason if i’m an enterprise we work with anheuser-busch they don’t need just the new york times they also need uh beer business daily which tells them about how the craft beer market is doing in the pacific northwest uh in terms of the business we booked over a million in revenue so that’s a million of hard revenue and 1.2 of bookings some of uh the companies we work with include anheuser-busch as mentioned visa and also publicist and havas which are respectively the number one and number two marketing and pr agencies in the world in terms of why people come to us if you wanted to get these subscriptions yourself be our guest it costs you over a thousand dollars a year just for five different sites obviously that’s not going to scale if you’re an enterprise and some of the other problems in the space and the reason we’ve been able to get so much traction 18 months uh number two there is no tech enabled way to buy group subscriptions so if you wanted 10 licenses from the new york times today you’re essentially filling out a form and then number three now three out of every four news sites require a subscription or have a paywall when we started the business now a little over three years ago that number was at uh 30 so about one in three sites so we’ll stop there this is awesome this is awesome so we can just recap uh because i think some people are having trouble in the stocks platforms they might have missed the beginning of the pitch but basically what you did is i work at a company i go try to click some article to read some important news story that some my coworker sent me i hit with a pay wall oh hey man what did it say i don’t have a business insider subscription and our company which is let’s pretend we work at google oh google uses nickel pass so i can just use the chrome extension and bypass the paywall because google has paid for a multi-seat uh license to business insider so business insider is getting this huge bulk subscription buy and they’ll give it at a discount google wants its employees to be able to read news and employees don’t have to pay for it out of pocket that’s what happens that’s that’s that’s exactly i’ll add some other things publishers right now convert less than one percent of the people that come to their website to pay for the full subscription so it’s a win-win for everyone where they they’re basically getting all these people that they would be monetizing at cents on the dollar per year from advertising but do you if if google buys 20 seats do they only get business insider or do they also get all the other publications you had listed there and if they if the second one how do you figure out who which publisher gets paid what money right yeah so we have over 200 publishers in our network we add more every day we create bespoke packages so how we have an initial package that’s you pick six out of ten publications it includes business insider and many others and that’s 23.95 a user a month for that package after that we’ll upsell from there and we work with customers to design custom packages based on the industry you’re in and the role you’re in in your industry so if you work at a big bank and you’re in marketing in pr you’re going to need a very different set of publications than someone who’s at the coms team at google but you will be able to work with you to customize that and a lot of that you’re now able to do on your own on our administrative panel but then how does uh if let’s just use round numbers let’s say it’s thirty dollars a month does this and you have two publications does business insider get ten dollars new york times get ten dollars and you guys get ten dollars so what we do is we work with the publishers to either take rate cards they have or create ones from scratch and so that way in the custom package the publishers always made holes so in your example it all depends on the number of seats that google signs up with so if they sign up with uh 10 people or a thousand people the price may go from 10 a month which is a 20 discount off of retail to two dollars a month which is you know much more off of retail and then we bundle that and then charge an administrative fee on top of that and that’s the bespoke package what’s the fee percent uh so right now gross margin is anywhere from 44 to 55 um and that’s a combination of not only the seat fee but we integrate with uh octa microsoft active directory so it’s really single sign-on for news public defense and we basically handle all of the admin uh for both the enterprise and the publisher that’s amazing so uh let’s talk let’s talk about the traction okay so you showed a bunch of publications that you guys have gotten to agree with this how many companies are paying for this i don’t know if i i missed that part or uh it wasn’t in there yeah yep so we have over 125 companies who we currently work with and we’re we’re adding more every day both uh smaller companies as well as large enterprises uh and what does that mean for revenue for you guys yep so we’re at 1.2 million um arr and we’re on track to be 3 million by the end of the year and raising at a 15 million valuation and that’s 3 million as in net revenue and you get or is that three million as in you there’s three million there’s three million for the bundle and you take 45 to 50 of it that’s right the second one correct so more like 1.5 million is that in real net revenue is that right in net revenue yes 1.5 and um okay great and so and how do you how do you onboard customers so what do you do to go get the next 25 50 customers what what happens well i think one of the things that we’re really excited about is the 120 companies we have they have over 400 000 employees so what we found is that it’s much easier to upsell within an organization once you land them so what we’re seeing is that our gross trajectory if we go from the one percent to three percent that’s how you get to the three and that’s why only focusing on two segments right now marketing and pr and then consumer finance that doesn’t count telco doesn’t count on some of the tech companies you mentioned it doesn’t count international which is actually my background post gotcha so you’re just going to expand within the companies you’re already in to get to to get to three million okay but how do you get more customers uh from here what is the strategy is it outbound is it inbound is it yeah program what do you do yep yeah it’s we primarily have a cold outbound marketing strategy um so we do a lot of lead gen and then we do some organic search and organic social and now this is a cost to companies at a time when a lot of companies are cutting costs right so today they’re just not paying for this and employees are just not getting the benefit or they’re paying you know employees pay out of pocket yeah um if i do this and i have you know one percent of my employees doing this all of a sudden i’ve added a i don’t know what your what your average volume is but let’s say 10 grand 10 10 grand uh a year what is the average cost of company so that that’s grown when we first started it was roughly the seven to ten grand a year now what we’re seeing is uh 50k um and that um having opportunity to grow and here’s the thing you know people see it from two lenses so there’s the cost savings and they look at our class and they’re like well it’s better than everyone buying it at retail and expensing it back to the company so that’s one thing the second thing is in a time like this if you miss a critical piece of news in your industry the opportunity cost for that is much higher and so you’re going to feel some type of way for not paying the 50 bucks per person per seat because you’re like oh i was trying to like basically refine the cost we like to say what we’re going after is the budget people used to use on soda machines because this is one of those oh oh i think we’ve lost those out there um but yes this is an expense that people actually already have they just don’t realize that frequently it’s being put on personal cards and then expensed back to the company so the other thing that we’re doing is actually giving finance and procurement a single line on them so they really understand how much they’re spending on news and information and data which for the 40 professional the 40 million thousand the 40 million professional services workers in the us is extremely important to know okay great uh i also feel like there’s probably some strategy where you go to anheuser-busch and then has a you know once they have their one percent of people on you go to every other beer company out there and you say hey anheuser-busch does this so that their employees can read beer journal daily and this and that uh you know would you guys be interested there’s a i think within industries you could sort of play play off each other a little bit exactly and we we’ve seen that um social proof model work extremely well with marketing and pr firms and with financial services firms allison how big is this going to get you know what are you what you’re going to get to 100 million in recurring revenue what’s going to happen yeah without a doubt so we are we see ourselves as really the next uh version of cable um and how we access news content and information um digitally is going to change drastically from how it it works today um and nickel pass is going to be the single stop solution for that what um how many employees let me ask that same question a little bit differently uh because sam likes to hear kind of how big is the dream i like to hear a little bit differently which is what would i need to believe for this to be at 100 million in revenue meaning how many companies how many people what how do you work your way to 100 million in revenue yeah so our goal has always been to get everyone access to quality news and information and by everyone we don’t just mean professional services workers we also mean individuals and there’s a certain price point that individuals can pay for access to quality news and information so we’re exploring what that is but i think it’s extremely important to note that over the past five years we’ve understood the general public so actually you’re gonna be the math so like this many companies paying this much a month is 100 million in revenue and then i need to know is that a believable number of companies that’s like you know out of the total universe so how many companies would you need to be paying for you to be at that point yeah so we’d need to be at about um ten thousand companies based on on our initial math so 10 000 companies and um you think that those will you know right now you’re at whatever 25 you think about the end of the year you can get to maybe 40 or 50 something like that uh oh no we’re at 150 right sorry you’re 150 great yeah we’re you know well beyond the that initial group and what are you guys gonna have to do to go from 150 to 10 000 companies what will actually need to happen yeah so it’s it’s two-pronged it’s that we have to increase our penetration rate on the existing companies from one percent to three percent um and that number is even achievable up to the five or ten percent range and then we have to increase our penetration in this in the specific sectors from currently 0.01 to uh closer to one percent in each sector so financial services marketing and pr um and then universities and associations as well gotcha okay all right thanks i think uh we might be able to add one more did you have you raised any money so far and from who yep yeah so we’ve raised about 5 million so far that’s our last round was led by river park ventures so the seamless food ordering company co-founders because they took the same b to b model to get to a b to c model um and we have a number of uh other institutionals as well 68 capital rate ventures damn you raised 5 million at a 15 million valuation no smaller valuation in the past so this new this new round is uh 15 million free money oh so you gave up a lot of the company yeah what are you how are you gonna stay motivated you gotta yeah so i understood so we are um reworking the cap table as we speak because basically we pivoted the company from a blockchain micropayments and so that’s total over the pivot that’s uh by the way respect for pivoting away from blockchain that sort of shows me that you’re a clear and independent thinker that didn’t just like oh here’s the trend we are a web three company for micro payments you can create a lightning and it’s like what do people do our customers actually want and in this case you found out what they actually wanted which was not not that not something else yeah customers hated it publishers loved it but it wasn’t selling to um to anyone as recurring revenue right and we could have raised it a much higher valuation but we chose to fit it i think i think your product is awesome it sounds like your cap table is shitty to be blunt i would love i would love to hear a little bit more about how i don’t want to hear about it now but like how you’re going to get out of that situation i think it’s it’s hopefully it’s fixable because this product sounds pretty sick um and we gotta ask people are asking why what is nickel pass what is this name why are you named after nickelback uh news used to cost a nickel so that’s okay why right great and now it costs 23 per person per month congratulations this is sick this is sick i think your pitch was awesome i said what i thought about the cap table the product’s badass um one little thing between your act together though between you and your co-founder you guys should figure out who’s going to answer questions and which types of questions so you automatically know when to defer because it’s a little bit of a signal when you’re doing a pitch and like both are kind of like me and sam does we talk over each other a little bit it’s okay in a podcast or realm but as a company you kind of need to know okay technical questions this person’s going to answer uh growth questions this person’s going to answer uh or this one person’s going to answer everything and then they’re going to say you know allison why don’t you talk about that you’re you’re you know she knows it’s better than anybody and so you’ll be able to kind of defer a little bit better um in that sense but good really good job overall with the pitch that’s my only kind of pitch feedback for you great thank you guys this data is wrong every freaking time have you heard of hubspot hubspot is a crm platform where everything is fully integrated well i can see the clients hold history calls support tickets emails and here’s a test from three days ago i totally missed hubspot grow better sick sick company god damn man that cat table really [ ] things up for her yeah uh yeah i think that’s okay though i think it’s recoverable or um you know like some people like you know how are you gonna stay motivated some people are motivated you know the number whether the number whether they’re on 50 or 35 percent they they sort of feel the same about it it’s their baby and also they can be motivated by the regret that’s giving away so much of the company that’s crazy to me i i am i am friends with this guy who sold his company for a billion dollars and he 990 million and he walked away with three million dollars because he had it was five of them either or four of them so it was four or five of them and they raised all this money and he walked away with three million dollars on a billion dollar value sale and that crazy i i can’t i don’t understand how you get motivated when you’re not gonna get paid yeah well some people uh some people motivated by the mission some people don’t do the math some people are like well [ ] i’m stuck now i made that mistake and now uh i guess i gotta live with that i gotta i guess i gotta eat that one um and by the way shout out to her uh we don’t do public math but we sure as hell make founders do public math when they pitch us uh because you know you gotta be able to answer that question in fact i don’t even care what the like some people think that when i ask that question how do you get to 100 million or how do you get to 10 million arr i’m like judging whether uh i’m judging whether that thing sounds feasible or not and that’s part of it but the bigger part of it is does this seem like the first time they’ve done this math or have they done this before because if they haven’t done it if they haven’t done it before i’m like oh this person’s not actually thinking of plotting how to like take over and like how to build this into something big they’re just kind of like buried their head in product and like they may not have if they haven’t thought of it up till now they’re probably not going to be thinking about that in the future in this case i thought that she she had an answer i haven’t done the math to go check if that answer was like you know [ ] or real but she had at least thought about we need 10 000 companies at our current you know pricing and scale to be at that um you know that revenue mark well and i and and i think people like think it’s a trick question towards like how does this get big or um how are you going to exit and they’ll say like this [ ] of like well we’re not thinking about an exit it’s like dude come on just like this like talk real like a good answer is like well the worst case scenario is i think we’ll get to 5 million in this many years and someone’s going to buy us for 50 million and you’ll get a two or three x return i think that’s like a likely worst case scenario best case scenario i actually think we have a clear path to 75 million and we’re going to figure out as we go and i think these possible doors might open up and then we could either go public which i would love to go public or we could sell for this much money or we just own the company forever and we grow into this i think that answer works on you because you invest your own money for most venture capitalists they’re investing in other people’s money they don’t care about the two to three x uh i know but i’m trying to downside protection it’s like to them it’s either a zero or it’s huge and so you’re better off focusing most of the energy on the uh how this ends up huge and you might just say you might say things like um so you don’t have to say oh man i can’t wait to go sell this for a billion dollars but i think you could say like like we had a buddy ramon who was telling us about this he’s like look right now i have you know i don’t know what it was like a hundred thousand um you know like pet owners um who have bought from me and i know their name their address their dog’s name their dog’s breed their dog’s age i know everything about them he goes and he’s named like the big you know chewy doesn’t know any of that because they sell on store shelves but i have the largest databases i think that asset’s going to be worth a lot of money to one of these companies and i think that you know that’s beyond just the sales that we’re already doing and so you can kind of say your downside protection that we’re building a valuable app that’s kind of what i mean i’m just saying that like just it’s okay to show weakness and it’s okay to show uncertainty but at the same time you also want to have like a yeah but i think this could happen and here’s how what the flight booking guy said is also perfect which is you don’t have to say this is going to be a billion dollar company you’re just going to autopilot like a you know venture capital robot like you know what he could say is basically you know he’s like he’s like you know i don’t know what the i don’t know where the ceiling of this is because nobody’s ever done this before but there’s a to get there then we’re going to look up and figure out what’s next and i think that’s a totally honest but also exciting version of that answer which is to say like look we don’t know how high this thing can fly but i know there’s a clear path to this i’m just laser focused 50 million an hour before i go to bed i kiss my daughter goodnight and i say 50 million in arr and when i wake up and i’m brushing my teeth i say 50 million are because i know that that’s what’s in front of us and like i can’t sleep because it’s so obvious that there’s a step-by-step path to go get there so you can say some [ ] like that and people get like people start to believe that you believe that that’s your certainty that there’s a clear path to that makes them certain there’s a clear path to it badass let’s do the last one up colton take it away hi i’m colton woodard founder of little ducky’s pool company i’m a pool industry expert with a knack for sourcing companies that may not know they want to sell and creating acquisition plan started out with my own pool maintenance business from zero clients now i make about eighteen thousand monthly recurring revenue all in under three years my father-in-law owns a large pool resurfacing company in orlando florida and found our first private acquisition deal from a friend who was feeling like he was ready to retire instead of just letting his business dissolve we negotiated a purchase at about a multiple of you know four months of the monthly gross revenue currently we’ve secured two upcoming purchase contracts in the south florida pool construction sector with another in negotiation for quarter four we are projecting 10.3 million and gross for our 2023 sales with a yearly increase of 13 as we streamline the processes and add in modern tech or we’re looking to build a portfolio of pool construction companies in south florida and gain a majority of the market share and then add in pool cleaning and maintenance on these accounts for additional monthly reoccurring revenue ideally we like to secure locations in all of south florida within the next five years with four owner operators in place who know the industry know the business how to utilize specific contractors we’re looking to take over the industry and build an empire like real estate now is the hottest time to invest in south florida pool construction sick so uh let me bait is this basically like a pe play where you’re buying uh baby boomers businesses who put pools in people’s backyards in a simple and a simple explanation kind of yeah i mean it’s it’s a little harder than that because you know sell 40 you dig 54 inches you hit water so if you don’t know what you’re doing you could really muck it up but yeah so we know the industry we know the pool we know pool construction so we can find people that are ready to retire and instead of letting their business just go to the wind and the other guys pick it all up we can utilize different contractors that specialize in you know form and steel excavation take his company and he sub contracts out to the plumbing guys and the tile guys the screen enclosure guys and he’s spending so much money on paying subcontractors whatever they need to charge because he’s got to hire because he can’t do it himself so we buy these individual companies that can complement each other bring everything in-house and we can get our permits done faster reduce our wait times and increase profits and turn over more projects year over year so that’s why we’re looking at thirteen percent increase on our product so just exp uh multiple choice answer your company does what do you a sell software b buy existing pool companies uh c uh invest in cool cos or d other which one of those four things do you do b we we buy pool companies mergers and acquisitions yeah so you you’re rolling up pool companies and you’re rolling them up and you are a good you are not buying them for less or anything like that you buy them at some fair value but you are better operating because you do what a you uh have different expertise in house b you have better software c you uh have economies of scale what is the advantage you have uh a and b so we we know the business we do it well and we implement modern technology so 3d modeling designs for the pools so we can email it to customer we don’t got to go to their house with a pen and paper and show them how it’s done so we can just email it over and then also since covet hit permitting has been horrible slowed down a lot now we can do digital permitting where we can be on video chat with the with the county that we’re working with and they could be right on the phone we could show them step by step and get the phases approved without having to wait for time on their schedule for them to come to the site so the result is you guys build pools for faster and cheaper how much faster and how much cheaper we build them faster we don’t build them cheaper it depends on the county you know each county is going to be a little bit different but if you don’t have to wait on the subcontractors to get you on their schedule or not show up and and reschedule on you it’s it’s going to be at least 20 percent faster okay great and you up till now you’ve bought how many pool companies so right now we’ve signed we have our own we own two but we bought uh we have two purchase contracts signed an agreement and we have one in negotiation that we’re looking to get another round of funding for and then explain when you buy a business like this uh you know it has this much in ebitda typically it’s been in business for 10 years or whatever and you’re buying it at some multiple um and you’re financing it how well the first two we sold our houses what do you do for the next two we’re looking to raise capital and then we’re also going to make a plan using the um signed contracts usually you’re two years out you know two years booked out with these with these contracts for the pool companies that we’re buying so we’re not only we’re buying the company we’re buying the crew we’re having the owner stay on for two years as a consultant while we put a project manager in place for him to train and then we’re getting all of those contracts um and they get paid in phases so we use some of the working capital to put aside into another fund to use to purchase more businesses as we as we roll out all the locations we need between like i said form steel excavation shot crete tile marsite plaster guys we’re we’re going to buy all the specialty contractors and roll them all into one company so sean and i’s one of our best investments ever we i think we both invested at the same time into a business johnny is still there yeah we both invest we invested into this business uh that started by our friend sieva called endure ventures and his whole premise was to buy businesses that baby boomers want to retire and their kids don’t want to take it over basically that’s exactly what’s going on and sam zell sam sells the guy who basically created the reit he um owned schwinn bikes he owned the tribune he owned a bunch of stuff rich guy he owned waste management i um anyway he said recently in a podcast that he is making more money off of buying businesses from baby boomers who don’t want to pass their companies onto the kids than he has ever made in real estate and so that’s just for the proof that this is actually quite interesting and i think sieva actually bought a pool business didn’t he shawn yeah yeah dolphin pools it’s in arizona yeah and they’re killing it i would argue that that’s probably the path you should go and for these pitches you should entirely pitch it that way um another way that you could maybe pitch is the guy who started i was going to bring this up on the podcast sean but the guy who started wework uh we uh upwork have you heard of upwork it’s like the outsourcing tech company he um started this new company called i actually don’t know how he’s air guillon e-r-g-e-o-n and it’s a fence contractor and installation and repair business and he just raised like 40 million dollars for it and he bootstrapped it to like 400 employees do you see this sean no i’ve never seen that that’s crazy dude it just got relaunched like or just got released like two days ago on techcrunch he was like they were like i uh we wanted to keep this in the dl but basically we bootstrapped this into a monster business and we just raised financing for it and at a huge valuation because getting someone to build a fence it’s a pain in the ass well we just went and just like you so what they did is they used a little bit of technology and they made the process easier and better what sieve is doing is he’s just saying no one wants these businesses we’re going to buy them for cheap and we’re just going to install a manager and let it run so anyway i think if i was you i would go one of those two routes and i would go all in on one of those two routes i imagine seeing that your website i went to it it looks like it’s built on wix technology’s not gonna be where you’re gonna play it’s gonna be the pe route but the problem is is you don’t actually seem entirely bought in on that route so that’s like my fairly critical feedback do you think i hit the nail on the head there sean if i can go ahead called if i can interject i i think that yeah that’s that’s pretty accurate it’s a little it’s a little bit more difficult you know these guys they are retiring but they also it’s very difficult to get into this industry you have to have four years of experience and then go in front of a board the dppr to even get approved to have the license to do it so it’s not like millennials or gen z can just hey i’m going to start a pool construction company today you’re going to have to go work for somebody for four years to get that experience to even do it so it’s it’s really not super turnkey so there’s not a lot of competition for the pe um to go out and scoop them up you know we’re poised and ready to strike yeah um i would say i’m just gonna give you some pitch feedback because i think your pitch was uh confusing and therefore hard to raise money which is what we’re here to do right so number one uh like use a you you had a slide up there that had a bunch of text but then you talked a bunch and you weren’t talking exactly you weren’t just saying the points on the slide you were telling a story which was good it’s good to tell a story but if you’re gonna tell story to put like a picture on the screen um so it’s like you know this is uh you know this is my pool company we’ve been doing this this business spits off this much cash and we’re you know we’re not alone there’s 400 of these just in the florida area where i you know where i’m from and i’ve bought two more of these and these are great businesses to buy in fact i sold my house to buy these because they’re such a better investment than my home and you know this first one we bought we bought it for this much it’s already paid itself off in two years and blah blah the second one blah blah blah same thing and for each one of these we have a playbook of how to buy it grow it and like improve it from where it was we improved each of these businesses by over 25 percent within the first year okay great so we’re going to keep doing this we have a plan that is working um you know but i don’t have any more houses to sell so it’s time for me to go raise some money and what i’m gonna do is i’m gonna raise five million dollars i’m gonna go buy 20 million dollars worth of uh of pool pool companies and we’re gonna start rolling these up you’ve probably seen these roll ups get pretty big this roll up in the dental space got this big this roll up and the pool space got this big in a different state you know sam zell the guy who invented the reit is doing doing these roll up the guy who started upwork is now doing this with fencing companies um this is a strategy that works now the problem is most people don’t have what i have they don’t have 15 years of pool construction experience so even if they wanted to do this they wouldn’t really know where to start they wouldn’t know the nuances of permitting and i could say a bunch of words you’re not going to understand but that those are kind of 15 years of hard work lessons and so today i’m coming here to i’m going to raise this i’m going to build a billion dollar pool roll up company and like you got to say that category of your company the size the price all of that i think would like i don’t know if you heard that in the chat i know stocks having some problems right now but if you heard that the chat go one to ten uh where was my pitch on a scale of one to ten of clear and compelling because that’s where you need to get this too because i think you actually have a really good idea uh i don’t i don’t think we need to we need a smart investor like you sean because man you you said it perfectly yeah but he didn’t want to do the work he wants you to do the work yeah i want you to be the one who says like you know i i want to invest in people who figure these things out if i’m if you need me for help honestly it’s uh usually a bad sign for my investment uh like i want to be helping a rocket that’s already going and not like pushing something that’s at a standstill and so um well you know you know the investment industry and you know the roll-ups and you know the comparables i’m i’m out here doing the doing the hard work managing crews fair enough fair enough uh and so i think take that and basically say okay the problem was i wasn’t clear on what type of investment vehicle this is this is a roll-up second um i gotta weave my story just a bit of my story which is that i’m i’ve got tons of experience doing this i’ve already started my roll up this is not just a idea that’s pie in the sky i already got the first two under my belt i did those myself bootstrapped and they’re working and now i just got to tell you how we’re going to go from 2 to 20 doing this and that when we have 20 it’s going to be worth this much because i can just do some math say 20 times each one is worth 10 million dollars now i got a 200 million roll up uh if we if we could pull this off right beautifully said the other thing is you didn’t say anything about debt are you taking on debt for doing this you said you’re kind of raising money to buy the next ones why aren’t you using debt we haven’t taken any loans we thought about it we thought about doing sba but i mean it just made more sense to sell our finance so what we we actually did was we negotiated like a 10 down with seller financing over five years of the balloon payment and the it’s so cheap we can just dude why didn’t you say that that’s a that’s a great point i’m buying these for 10 percent down i’m like giving you interest i’m giving away my secrets over the internet to thousands of people now millions of your podcast listeners so here you go there’s no one’s gonna you you it’s not a secret see selling friday’s secret uh it’s in fact you kind of made it sound like you don’t know what debt is because you didn’t say anything but uh now we’ve revealed the truth okay great honestly again i think you actually have a very good business idea um presented slightly differently that’d be you know i think it could be very investment worthy especially right now you know you see stocks going down you see crypto going down these private companies are raising huge valuations with like you know software and a dream whereas you’re like actually i buy successful profitable companies and i’m just a better operator than the mom and pop and i’m gonna aggregate these because like i just have a playbook that i can just keep rolling out and by the way i buy these for 10 down so that means you know uh you know my cash on cash return after you know 15 months looks like this and so you you have a very very strong pitch and you just got to like you know put it all together yeah after 30 years of doing something they’re going to be real tired you know they don’t want to they don’t want to push the needle they don’t want to make it bigger they have a paycheck coming in salary they’re taken care of so right there was a guy so right now for the listeners colton he’s sitting in front of a bookshelf that’s empty and someone just says uh peter thiel’s zero to one is not on his bookshelf and for that reason i’m out this is where all of my trophies are going to go for uh for all the wins we’re about to have oh lean startups not on his bookshelf for that reason i’m out yeah dude you seem to be spending too much time actually building your business i need somebody who’s way more into reading about business yeah you don’t seem like you do yoga i’m out you’re on a gamer chair you’re not on a treadmill desk i’m out you eat carbs i’m out yeah that’s hilarious uh thanks dude thanks for coming on thank you so much all right uh i asked i don’t know if ollie’s gonna pop up the guy starts talks but that was that was fun um some i think some people need some work on their pitch not as much work on their business but work on just like saying what the [ ] they do so let’s go most interested to least interested uh let’s rank the companies based on on that i’ll kind of remind you what they were so there was 5x that was the first business that pitched which was doing something that we could barely understand but had a million dollars of ar commitments um you know for his kind of like marketing stack that he was or you know there’s like vendor stack that he was putting in a box then we had i think fly together which wasn’t their name it was like bukhari or something like that group booking on travel uh third one we had was uh orem who was doing munch i think uh which was taking creators content and letting you chop it up into bits and letting them making it easy for them to repost using ai and some software then we had uh the last guy was duckies and before that we had nickel pass did i miss anyone all right i did miss someone or no no i don’t think you missed someone i think my ranking from most to least from the ones i would want to invest into the least i would actually put nickel and fly together maybe nickel first but the fly together bakari i would put that they would trade for one or two in the middle would be 5x and then uh tied for the bottom ones would be uh the jelly smack competitor and duckies okay all right i like it mine would be fly together number one i thought that uh he seemed great and the business seemed you know pretty straightforward and had momentum and you know i need to go look at the competition like is it really as backwards and he’s kind of the only real one doing this as it made it sound but i i like the sound of that one um i actually think that duckies is probably the second or first best investment uh but i’m not sure i would want to invest in colton just because you know he seemed like i think i’d want to hang out with him but i’m not sure i’d want to invest in him because i feel like i’d just be frustrated because he speaks a different language than me he speaks digging holes in the ground and building pools and like i speak like frameworks it’s like you know hey colton i like you just change the way you look for me please yeah just like just talked entirely different for me if i invested in it i’d be like look we’re allowed to hang out but we’ll never be allowed to talk about the business and like in 20 years just mail me a giant check and just in between i need to pretend it’s gone uh so that’s that’ll be mistaken and by the way i’m colton i’m messing with you [Laughter] um also i love the name of that little duckies that’s a great cool name uh i do nickel pass three and then the other two i probably wouldn’t invest in so those are kind of like four and five um all right ali you’re here the crowd is beating you up because stonks was crashing ollie just is it because we’re too popular are we just too popular is that what happened or or is it somehow something else and this is ali moyes the founder of stocks yes thanks for having me guys great great show loved the real talk honestly i think it’s it’s the best real talk we’ve had on songs uh and and uh you know the comments show it um yeah so you guys crashed once you this this is one of our biggest events um uh and we were also in the middle of like a code migration so there were more issues at this event than the last like 50 events put together so the stream crashed a few times but a page refresh did fix it but it it will be a lot more stable going forward so thank you for hanging in there and i could attest that so people don’t know this me and you we used to compete at our previous startups so you built stream labs we were building bebo we’re both trying to build tools for live streamers on twitch and so i’ve seen you execute from uh you know first of all that we became friends kind of towards the end um but like you’re good and uh when you decide to do something uh you guys pull you know you guys are scrappy and you pull it off and uh actually when we were competing against each other i had asked i told uh michael burch who was the founder of the original bebo and he was our investor i said yeah there’s this company streamlabs out there he’s like who’s behind it and i told him your name he goes i know these guys he used to have some company called peanut something and he’s like oh these guys these guys are like you know they always just find like the thing that people want and he was basically described just very scrappy entrepreneurs who will just like kind of like you’ll never die and you’ll like kind of just keep iterating until you find this like hook that people want and then you’ll like go for it uh we’ll go for it with like full force is that an accurate thank you thank you you are your duke and sean matt have a lot of respect for what you did as well amazing products uh and you guys kick your ass for what it’s worth i feel like the uh in the end we were competing with you guys but it really you guys kicked our ass no no it’s uh it’s great i mean um i have a lot of respect for for for you and uh you know what you what you’ve done in uh birch as well um but uh amazing amazing event today guys it’s just our our team has been loving it the chat’s been loving it i think sam asked um everyone should we do it again seems seems like the chat is uh really into it dude so on the podcast yesterday we talked about this company called stake and they’re like an online crypto gambling website and they basically give drake a certain amount of money like 10 million dollars a month in order to get 20 million dollars a month in order to gamble on the website and he tweets about it and people come and watch him gamble and they give him free house money to play with in order to attract more users so we’ll take two this is a gambling this is a gambling website it’s called steak.com yeah it’s awesome so it’s really effective for that is this a hint do we need to set up like house money for you guys like exactly okay yes exactly i think that you give us each like 10 or 20 grand to invest in different startups and by the way we will invest random ass influencers and also so we’ll go get you know we’ll get jake paul in here we’ll just go get a bunch of like other famous people to be our friend of the house and just give us a house budget to go invest in startups you know this is this is actually not uh a half joke half idea but this is actually not a terrible idea this is oh so we have a look don’t don’t don’t don’t assume smiling means a joke i am not joking i’m being dead serious we should do this so uh so the way we could do it is we we we have a small farm it’s called the best of stocks fund and we do write checks into interesting startups particularly high traction or great co-investors similar to what you guys look for so what we could do is for your next event we could each give you um one one check so you pick your one favorite startup out of the five or so that pitch at your next event and and we’ll write that yeah but i want uh we we want stakes in it bro ah okay so that’s that’s a little more work i have to figure it out that’s all right let me let me get back to you maybe maybe we could give you some carry on that or yeah that would be for something okay that’d be cool all right so um also people need to know that ali moyes is not the same as boys ali the the other guest on our podcast all the time did i call him i don’t know you said it right but people in the chat are like wait is this the deodorant guy it’s like no there’s there’s moyes on league that’s the other guy there’s ollie moyes that’s the stonks guy so i’m not the investing guy not the deodorant guy you to be sick of that i have to assume uh you know it’s fine it’s it’s more followers for both of us people we we confuse all our followers it’s great that’s amazing okay and also we’ve been doing this bookshelf meme this whole time get us a book off the shelf there something that has helped you’ve sold a company for over 100 million dollars i believe uh and uh so so you read books and you’ve had success go give us a book off that shelf there that you will recommend to the crowd something that you think has helped you um i think bring it over go grab the book okay okay dude uh he’s got a nice house does he live in san francisco now it’s actually my test to see if he’s wearing only underwear uh on a lot on on zooms and no he he passed he’s wearing wearing shorts if you ask me to get up right now you might be uh you know this this stream might might be rated you know pg-13 at least are you wearing only underwear right now i’m wearing my jammies which are which are more than underwear so this this is what i’m reading right now i have the same one dance read huge fan so it looks like uh i’ve actually bought this as well so it’s a compilation of uh night from 1964 i think up until 2010 or i forget the year of every single one of warren buffett’s annual letters and what you’ll notice i actually analyzed this his words per sentence actually gets shorter and shorter each year and i would argue that’s because he’s becoming a better writer and what’s really interesting about that book is he explains like really complicated topics like geico car insurance and incredibly easy to understand ways so i think that’s a good book to read that’s cool connor in the chat goes you picked the heaviest book he has power move i agree absolute alpha move of you just now to go pull a a you know 36 pound book off the shop i i appreciate that all right well uh ollie thanks for help tell your boy john hancock and the rest of the team thanks for making this happen this was awesome uh sean uh i think i guess we’ll do this again this was it was pretty good i think we had a little kinks workout but it’s pretty good yeah let us know tweet at us um if you’re if you’re here live or if you listen to the pod tweet it is if you want us to do more of these or or uh you know if this should be a one-time thing