Speaker 1 (00 : 00)
Speaker 2 (00 : 00)
My guest today is hobby Fonda Villa. He was born and raised in Barcelona. Spain has been and has been creating his own ventures. Over the last 13 years, at the age of 20 he founded a retail company and raised up 200 employees in 14 stores across Spain. Later, he co founded. Hold it. A business operating system for small businesses to manage sales, finance operations and h r and one single beautiful platform hobby. You ready to take us to the top?
Speaker 1 (00 : 25)
Yeah. Thank you. All
Speaker 2 (00 : 26)
Right, so this is great. So it sounds like you’re serving small business owners. Help us understand is hold it a pure play. SAS company.
Speaker 1 (00 : 35)
Uh, it is until today. Yeah.
Speaker 2 (00 : 38)
Okay. What’s happening today?
Speaker 1 (00 : 40)
Well, actually, as you know, there’s a big trend of saas companies moving beyond being only software and entering into other type of services in our product. Actually, there’s a lot of things happening around financial services. So we’re about to deploy our first Let’s say this is around this which is holding payments together with stripe payment initiation, um, to start offering this step of of services to our customers
Speaker 2 (01 : 09)
And do you see this being a meaningful revenue stream for you. In other words, you know, over the past 12 months how much transaction volume have small businesses put through? Hold it.
Speaker 1 (01 : 19)
So in 2019 we had G. M B of almost four billion years
Speaker 2 (01 : 27)
And help us understand how that works for people that for people that don’t use the tool, how does the business owner use you?
Speaker 1 (01 : 34)
So the basic use K, it’s, uh, this type of small businesses. Normally, they tend to digitalize the financial management. Also invoicing accounting. So this is the space use case that we’re recovering, and this is where we have 60 to 70% of the features. But then from there, help them to digitalize other areas of the business that normally will keep on a spreadsheet or on paper. Or, you know, like these people doesn’t really have a manager on HR. So nobody’s thinking on buying a dedicated HR tool.
Speaker 2 (02 : 07)
That’s right. So you’re helping them with invoicing accounting, managing their team, project management, inventory management and even CRM.
Speaker 1 (02 : 15)
Yeah, Somehow everything is connected. No. So we’re not pretending to be Salesforce. We’re just giving you the right features to our customers to be able to track sales. And not without really going to a dedicated CRM that is actually something they don’t really need
Speaker 2 (02 : 33)
And hobby how what customers pay you on average per month today.
Speaker 1 (02 : 38)
Today is around 40 years per month.
Speaker 2 (02 : 41)
Okay. And when did you launch the company? What year?
Speaker 1 (02 : 45)
Back in 2016. We started with hold it. And we launched the first version on January 2017. So we’ve been a little bit more than three years and a half in the market. And
Speaker 2 (02 : 56)
Who is we? What are your co founders?
Speaker 1 (02 : 58)
So my co founder Burnett. Uh, so I met him on Facebook, and he has an engineer background. Well, I mean, he’s been goading since he was seven years old and we had a match on social media about like we were, you know, wanting to develop a really similar project. And and we were, like, really complementary profiles. So we met and and and we started with Hold it. Do
Speaker 2 (03 : 21)
You guys put the equity 50 50?
Speaker 1 (03 : 24)
Speaker 2 (03 : 24)
Wow. Very fair. Are you guys hobby? The only ones on your cap table today, or have you raised outside capital?
Speaker 1 (03 : 34)
No, we’ve actually raised three rounds until today. So we have a group of business angels that basically helped us on on on starting with the project. And then we on boarded already to business. How
Speaker 2 (03 : 49)
Much total have you raised?
Speaker 1 (03 : 52)
Uh, €7 million today.
Speaker 2 (03 : 54)
Okay, seven million to date. And what? Walk me through? Sort of how you got your first. So, you know, you find your co founder on Facebook. You guys launch your M v P in 2017. How did you get your 1st 100 customers?
Speaker 1 (04 : 07)
Uh, well, we’ve used online channels and also since the very beginning. We want to build a an evolution of the year. Mm. Yeah. Mandatory things to make the whole the whole process of purchasing and implementation self service. So we needed to actually acquire customers that were already online. So we started using mostly Google search and social ads, and and we’ve been scaling the pay that channel until today. That’s still our number one channel.
Speaker 2 (04 : 39)
How much did you spend last month on ads
Speaker 1 (04 : 43)
Around 250 K.
Speaker 2 (04 : 46)
And how many new customers like, how much new monthly recurring revenue do you get from that? Spend
Speaker 1 (04 : 51)
Almost 20 k 9. are
Speaker 2 (04 : 54)
That’s great. Those economics work nicely.
Speaker 1 (04 : 57)
Yeah, Actually, we’ve been playing around a lot during the last nine months. We’ve created the growth team, which until last year we were super focused only on product development. So most of our team was engineers and customer success. To understand the customer feedback signs Summer 2019, we started to think about a We need to become also professional and user acquisition now. And so we’ve built our growth team. We made We made really good hires here. And we’ve done really good projects behind to be, like, more efficient into our acquisition machine.
Speaker 2 (05 : 34)
So what would you say your average cac is to get a new $47 a month customer.
Speaker 1 (05 : 40)
Uh, so now he’s around €300.
Speaker 2 (05 : 43)
Okay, three so called $370 something like that. And besides paid ads, Are there any other paid channels you’re testing like dedicated emails or branded content sponsorships, anything like that?
Speaker 1 (05 : 56)
Well, there’s multiple projects going on now, but I can say that today we’re living out of the page. That’s channel and the word of mouth is lashed by reality which represents 40% of our acquisition. No, because we ask customers. How did you meet us? Because the attribution is really hard. Not so, uh, we have multiple attribution systems. But in the end, what? We relies on what our customers are telling
Speaker 2 (06 : 23)
Us. Interesting. And so this is how you got your first? I mean, you knew early on that it was gonna be paid ads. So that’s how you got your 1st 100 customers used online channels. How many customers are you serving now? Today? Three years after launch.
Speaker 1 (06 : 36)
Speaker 2 (06 : 38)
Okay, 9000. And And what do you Where do you think you’ll experiment in the future? I mean, how do you go from 9000 customers to 20,000 customers?
Speaker 1 (06 : 48)
Well, I think so. In our case, we’re going to really micro segment also companies between one and 20 employees when we have customers. Beyond that, no, but this is our our focus. No, we’re talking that in Spain, France or other markets, this represents almost 95% of the economy. So the target audience is massive. The main challenge for a company like ours is how do you reach this audience at the speed and the cost that you want. No. Um So the paychecks channel helped us to make an acquisition machine really quick and reach these customers who are really in the high in 10 demand part of the funnel. Now we’re deploying other channels that are helping us to reach other types of customers. So, for example, the Partners Channel we’re partnering with accounting firms in one side and agencies in another side. And to be able to reach this type of customer who’s not really actively looking for something, and they are relying this decision into a partner, no into someone they trust from there, we’re also adding other product chirality elements that will help us to to reach other customers. So just to put you an example on the possibilities we have, um, our 9000 subscribers, they have 1.4 million unique businesses in their contacts in hold it, which
Speaker 2 (08 : 07)
Speaker 1 (08 : 08)
1.4 million unique businesses, which means that through viral tools we can reach and those businesses, most of them, they are potential customers of hold it. So what we’re doing now is to analyze and to develop features that allows us to reach those customers through our existing customers. So under the umbrella of the product chirality.
Speaker 2 (08 : 29)
So your 9000 subscribers, for example. They all have their CRM is connected. What you’re saying is you add up all their CRM you have potential to reach reach 1.4 million SNPs
Speaker 1 (08 : 39)
Speaker 2 (08 : 40)
I see. I see. Interesting. Okay. And so 9000 customers paying on average $27 per month. What’s monthly Recurring revenue today.
Speaker 1 (08 : 49)
So we are at almost, I think, $4 million. So doing the compression. But where the
Speaker 2 (08 : 56)
Euro or US or USD?
Speaker 1 (08 : 58)
So €33.4 million
Speaker 2 (09 : 01)
Speaker 1 (09 : 03)
Yeah, I’m really a r r.
Speaker 2 (09 : 05)
Okay. Got it. So yeah, about $4 million run rate or about caught $340,000 a month in mrr Walk me through the decision to launch this new financial technology product percent of G M V.
Speaker 1 (09 : 20)
Yeah, sure. So it’s as I said, No, there’s a big trend on on going in this direction. So in the end, with this small business segment, there is a limit on the how much money you can charge them. No, they have limited resources. So and we don’t want to change the game. We don’t want to go up in the market. So at some point you need to find new revenue channels to monetize better your customer base. But in the end, it’s also because we believe this is also giving a lot of value to our customers. So in the first stage of this deployment, we’re not thinking that much about making money out of that, but to give more value and to concentrate more actions into the platform now. As I said, there’s already the invoices are already issued in our platform. The invoices are already received into our platform, and what we want is to be also part of the process of the payment, both both from the collection and the payment side. So you don’t need to leave the platform to do that. And I’ll put you an example. So when a traditional SMB, they tend to have at least two or more banks. So once you want to pay your employees or you want to pay a bill, you necessarily need to leave the platform, go to one of those banks and initiate the payment by copying all the bank information from the platform? No. So we want to avoid this stuff process and be able to do that directly from the platform directly from the invoice. And actually, you can automate and start programming when you want to pay your bills without so giving features that normal banks are not offering today and that we’re going to be much faster and offering those super,
Speaker 2 (10 : 53)
Super smart. And if you’re doing about four million in terms of one right today, what are you doing exactly a year ago, Do you remember?
Speaker 1 (10 : 59)
Yes. So, a year ago Well, we’ve closed 2019 at two million. So we are, uh, so €2 million. And so this year, we’re going to do to do something around 2.22 point three x of growth, which, with the Corbett I mean, we’re quite happy because not bad. It was. It was really weird year.
Speaker 2 (11 : 20)
That’s not bad at all. Okay, so you’ve raised $7 million. When was the last Rays
Speaker 1 (11 : 25)
In April 2019.
Speaker 2 (11 : 27)
And how much was that? One for
Speaker 1 (11 : 29)
€5.5 million. And
Speaker 2 (11 : 31)
What valuation were able to raise on
Speaker 1 (11 : 34)
What what was the last valuation. Yeah, 22 million post money,
Speaker 2 (11 : 39)
22 million post money. Do you feel like that was a fair valuation?
Speaker 1 (11 : 43)
Speaker 2 (11 : 45)
Or you have plans to raise this year?
Speaker 1 (11 : 47)
Uh, well, it’s something always an open topic. We’re really cash, cash efficient company. So we still have 60% of the round in the bank. And so in our case, it’s not that we need cash to survive. It’s just that we have more cash. We can accelerate our plants. No. Yeah.
Speaker 2 (12 : 05)
So 60% of 5.5 million. You still about three million in the bank? No need for cash right now. Growing nicely.
Speaker 1 (12 : 11)
Yeah. Are you
Speaker 2 (12 : 12)
Profitable today? Are burning capital.
Speaker 1 (12 : 14)
We’re burning capital, but most of this capital is the for user acquisition. So we we control a lot of the burn. And also, as one of the main channels of spend is paid, that is something that you can turn off from one day to another. No. So you can really feel the control of the business.
Speaker 2 (12 : 32)
How much are you burning from? Internet burn?
Speaker 1 (12 : 34)
Uh, 200. 215.
Speaker 2 (12 : 37)
Not not bad, Basically, that you’re paid out. Spend like you said. And what’s your team says today? How many people?
Speaker 1 (12 : 43)
Speaker 2 (12 : 45)
How many engineers
Speaker 1 (12 : 48)
Around? 30. 30.
Speaker 2 (12 : 49)
Okay, very good. Any quota carrying sales reps at this low price point or No,
Speaker 1 (12 : 53)
We don’t have sales team
Speaker 2 (12 : 55)
Doesn’t work, right.
Speaker 1 (12 : 57)
Well, it was one of the main things we wanted to change is to make a self service product a cell service product that actually is quite white now. And so we like to say that it takes minutes to start using it, but it takes a lifetime to become a master.
Speaker 2 (13 : 10)
That’s right. Hey, churns critical in this space hobby as we wrap up, what’s gross revenue turn per month?
Speaker 1 (13 : 15)
Uh, well, the longer turn. So we don’t really track grass turn because we have a lot of movement on expansion and downgrades of people trying new adults and so on. But we have We’re quite proud of our luggage and rate. We have an average of 1.5% per month. Uh, working with the smallest business segment is quite good,
Speaker 2 (13 : 37)
And you expand by more than 18%. Your net revenue retention annually is more than 100%.
Speaker 1 (13 : 42)
Yeah. So our net memory retention is around 125%.
Speaker 2 (13 : 47)
That’s great. That means expansion is something like, almost for 40 to 43%. Yeah, that’s great. Last question on the G M V model. How you gonna monetize that? Are you taking 1%? 2%. 3%. How much you’re gonna take?
Speaker 1 (13 : 59)
Well, still an open topic. So, for example, in the payment gateway as we’re parting with stripe. So they are giving us a revenue share on top of their commission? No. So if they charge a 2.8% and we can get 2030% commission now, so we’ll be having I think something like 0.8 or so or a little bit less.
Speaker 2 (14 : 18)
So strike charges 2% and you will get 30% of the 2%. Yeah, something like that.
Speaker 1 (14 : 25)
8% is website just from the standard rate.
Speaker 2 (14 : 29)
Yep. Yeah, very good. So I mean, do you Do you anticipate all four billion going through this new partnership or No,
Speaker 1 (14 : 39)
I’m sorry. Can you repeat that? Because you freeze a little bit.
Speaker 2 (14 : 41)
Your processing. Four billion in G m v. If stripe takes 2% that’s 80 million And if you make 30% of that, that’s 24 million in revenue. Is that what your projections look like for this new stream or No,
Speaker 1 (14 : 54)
Yes and no. So we are not that ambitious, and we don’t think we’re going to be able to capture the 100% GM beef through the payment gateway, you know? So, for example, when we’ve done our financial model thinking about the thin deck, we’ve only used the invoices between zero and 500 or €1000 because we don’t believe someone is going to pay an invoice of €10,000 with a credit card. No. Um so Actually and we were going to work a lot on making sure the adoption of this feature is the right one is this is not something that’s going to happen. They want no. So, actually, our model is that we we do have four years to make sure that we’re able to capture up to 6% of the G m B, but only on the G M B below €1000 Invoices? No. So which, for example, last year, out of those four billion, we had almost 800 million of invoices between zero and €1000. No. Um, so we know when we released this feature, we need to work to make sure people adopt it, and people understands it and, you know, So it’s not going to be something from day one, but definitely it just makes a lot of sense. And we’ve seen other success cases, like wave up, that they just live out of the out of this, uh, financial service now?
Speaker 2 (16 : 14)
Yep. Very good. Hobby. This is good stuff, man. Let’s wrap up here with our famous five. Number one favorite business book.
Speaker 1 (16 : 20)
Uh, favorite business.
Speaker 2 (16 : 25)
Speaker 1 (16 : 27)
The hard things of the hard things.
Speaker 2 (16 : 29)
Number two. Is there a CEO? You’re following or studying right now.
Speaker 1 (16 : 33)
The CEO of Shopify
Speaker 2 (16 : 35)
Number three. What’s your favorite online tool for building your company
Speaker 1 (16 : 42)
For building my company?
Speaker 2 (16 : 43)
Besides, hold it.
Speaker 1 (16 : 45)
Uh, I don’t know. I don’t have a lot of them. No, but I would say that today in our company, slack and intra Ghana are the two main ones.
Speaker 2 (16 : 53)
Number four, Hobby. How many hours of sleep? Every night?
Speaker 1 (16 : 57)
Speaker 2 (16 : 58)
And what’s your situation? Married, single kiddos,
Speaker 1 (17 : 01)
Speaker 2 (17 : 02)
No kids, no kids. And how old are you?
Speaker 1 (17 : 07)
Speaker 2 (17 : 07)
33. Last question. What’s something? You wish you knew when you were 20.
Speaker 1 (17 : 12)
Can you repeat that?
Speaker 2 (17 : 14)
What’s something You wish you knew when you were 20?
Speaker 1 (17 : 20)
It’s a hard question, huh? Um, I would say nothing. I mean, if not, that would have changed my career. No. And I think everything you do takes you to where you are. No. So
Speaker 2 (17 : 33)
It’s not necessarily regret. It’s not something you would change. Just a piece of information. You wish you knew. Yes.
Speaker 1 (17 : 41)
Mm. Again. I mean, I’m quite happy of everything. I did even close my other company. No, but everything gave me, like, a really high level of experience on. So I don’t like to go to the past and change it so I would stake on on on nothing.
Speaker 2 (17 : 57)
Guys. Hold it. Launched in 2017. Did $2 million in a are right in 2019 have doubled their doing four million this year, just launching a fintech part of their platform where they’ll take a percent of G M B throwing through their platform. They process four billion in payments from small businesses last year. They serve over 9000 small business customers. They’re burning about $200,000 per month, but still more than three million cash in the bank. There last around 5.5 million in 2019 to $22 million. Post money valuation. They’ve raised $7 million Total. 71 people on the team. 30 engineers Churn is incredible in a good way. They have 100 25% net revenue Attention even in the SMB cohort space hobby. Thanks for taking us to the top.
Speaker 1 (18 : 37)
Thank you, Nathan.
Speaker 2 (18 : 40)
One more thing before you go. We have a brand new show every Thursday at 1 p.m. Central. It’s called Shark Tank for SAS. We call it deal or bust. One founder comes on three hungry buyers. They try and do a deal live, and the founder shares back and dashboards their expenses. Their revenue are pu CAC LTV. You name it, they share it and the buyers try and make a deal alive. It is fun to watch every Thursday, one PM Central. Additionally, remember these recorded founder interviews? Go live. We released them here on YouTube every day at two PM Central to make sure you don’t miss any of that make sure to subscribe button below. Here on YouTube, they’re big red button and then click the little bell modification to make sure you get notifications. When we do go live. I wouldn’t want you to miss breaking news in the Saskatchewan. Whether it’s an acquisition, a big fundraiser, big sale, a big profitability statement or something else, I don’t want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private slack community for B two b SAS founders. You want to get in there. We’ve probably talked about your tool if you’re running a company or your firm. If you’re investing, you can go in there and quickly search and see what people are saying. Sign up for that at Nathan locker dot com. Forward slash slack. In the meantime, I’m hanging out with you here on YouTube. I’ll be in the comments for the next 30 minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I’m on these shows, but I do it so that we can all learn. We have to counter those people. We gotta push him away, click the thumbs up below to counter them and know that I appreciate you guys support. All right, I’ll be in the comments. See a
Gglot (20 : 12)
Transcribed by Gglot.com