The Exchanges

Q And, and we had a, how many, how many engineers at the time?

A We only had like four people at the time, four engineers working on the product. And I had, I think maybe, you know, three, three kind of customer success and salespeople that we kept part time to go into the trenches with our customers. Um, so keeping product development stronger in that time and like, you know, going into the crisis with our customers, it allowed us to, I mean, it really accelerated our impact on the industry. And then on the other side of the Pandemic. We've, you know, five X our revenue since the bottom of the trough. We also didn't turn a lot during the pandemic, which I think was a major testament to the technology. Like we, we went in with, um, let's call it a 120 customers. And we, and we came out with, of those a 120, we, we came out with, you know, a solid a hundred of them. Like we didn't, we didn't see much churn.

AI assessment note: “We only had like four people at the time, four engineers working on the product.”

Q What are they paying for a month these days?

A It's all over the board. Um, our average comes in around eight K a month. Um, but we have enterprise clients that are paying 250,000 dollars a year. Um, we have some legacy customers that are still paying 2000, a thousand dollars a year. I mean, one of the cool things that happened is when we launched Prism, we were getting beat up for a thousand dollars a year. Promoters were saying, Hey, thousand bucks a year. Let's get that down to 800 bucks a year, 600 bucks a year. It was only on pure faith that I kept running the business in that moment. Um, but now we have a customer paying us over 250,000 dollars a year and they're not alone. Um, and that's a paradigm shift at the company. So, I mean, we, it's not like we've won the war. Um, but you know, that's very, very encouraging to start to have people pay us real money for our service. Yeah.

AI assessment note: “our average comes in around eight K a month.”

Q Yeah. That's incredible. Now, did you pivot the company or you still are doing software for live managing live events?

A We did not pivot the company. So, um, most of our customers, we, we use it to our advantage for sure. And I'll, I'll, I'll share that, but our, our core business, we, we kept the same, uh, software as a service for the people putting on live music events. The, the big thing that we added during the pandemic was we brought on the other side of the live music marketplace. So there is venues, promoters, and talent agents. Um, and we added talent agents as a new business line during the pandemic. Um, we're about six months into a beta. We have Around 20 customers and, um, and the customers are loving it. We've identified a small list of things that we need to do to really sweep that side of the market. And, um, and we're closing in our, our vision of being the ubiquitous solution for all sides of the live music marketplace. So things, things are frankly really, really great. So, yeah.

AI assessment note: “We did not pivot the company.”

Q What about, what about, what about two percent? Two percent of five hundred million is ten million dollars in revenue for you.

A This is, this is what I'm getting at. So for us, it's like, there, the question is, is like how, you know, there's a direct revenue stream, even if it's not 10% or five percent. And the strategic moat of being the payment facilitator and getting people, Like in love with that solution of like not having to work with their bank account every single time and having to be more organized and streamlined. That's what's exciting. But yeah, but there is a transactional opportunity as well. The other question is how much is that eight hundred million, you know, you know, chopped up. Like if you think of a POS system at a bar, like that's like a bunch of five dollar to 10 dollar payments. So for them to take, you know, five percent, it's like, you know, whatever, let's call it a quarter to a dollar. So that's, it's a, it's really easy for payments companies to take a bigger cut of a smaller transaction than a smaller cut of a bigger transaction, depending on the market. So that's something that we're working through right now, but still there's, there's, there's enough payments for it to be a very exciting opportunity for us.

AI assessment note: “there's a direct revenue stream, even if it's not 10% or five percent.”

Q So what, what take rate do you, if you process eight hundred million the next few months, do you think you can take a two percent, a five percent, a 20% cut?

A Absolutely not. I'm at 20%. I mean, the, so this is, this is, this is what we've learned is, like, you have to ask yourself, like, what, what propensity the market has? Like, what are they used to? So for Prism, like, what are we offering? Like, you know, in exchange for efficiency and better organization, um, like, okay, you know, but what are they doing instead? Right now they're sending ACH and wires, and that's like anywhere from free or like 20 bucks a month to like 20 dollars a payment. So we wouldn't have the immediate opportunity to take like, five percent of a payment to an artist. Like people would be like, all right, no, I'm just gonna, I'm gonna, I'm gonna save a little efficiency and go into my bank. It's not worth 5000 dollars.

AI assessment note: “we wouldn't have the immediate opportunity to take like, five percent”

Q Yeah. You can, Matt, you can mess with it. No big deal, man. Um, I love that. So yeah. So the reason I'm asking you this question specifically is I believe you've done most. Well, no, you did raise some, you raised 2.7 million, huh?

A Well, okay. Yeah. So we did. So yeah, to answer your question, like, how are we keeping things going right now? Um, it was a scary moment. I would say three weeks ago and you're in Austin when South by Southwest canceled, like a lot of kind of what is going to happen with the world. Like, And I, I think a lot of that is still going on, but the first week was just kind of like survival mode. Like, you know, 14, 15 hour days is trying to scramble and figure out what was going on. Um, and you know, talking to my advisors and plugging into the world and seeing what I should do. And the consensus was, you know, what, what the hypothesis that I drew is I needed to tighten the belt as much as possible. So pretty much immediately we slashed a good amount of the budget and without going into detail, I would just say like non-critical expenses.

AI assessment note: “Yeah. So we did. So yeah, to answer your question”

Q Wait, are you, were you profitable in June of this year, last month?

A Uh, we're, we're, we're working towards that. We're not, we're not quite there yet, but we're, we're using our runway to get to there. And, and it's, I could, we're in a healthy place right now. I'm just being completely honest with you. Like we're, you know, we're, uh, like I could make some cuts tomorrow to be profitable, but we have, We're in a healthy place right now and have some money in the bank. We're just kind of like coasting to, to profitability at this point now, but it's, it's really right around the corner and it feels good, but you know, we weren't in 2019. So some funding helped us get through that. And it, it really allowed us, it allowed me to keep a team of engineers that were working on the product.

AI assessment note: “We're not, we're not quite there yet, but we're, we're using our runway”

Q Number two, is there a founder you're following or studying right now?

A Um, good question right now. Uh, Right now I'm like, you know, fully into this whole COVID movement and like, you know, being as sharp, being as strong of a leader as I can for my team right now. So I guess I'm following myself and like spending the extra time combing every part of the budget and going the extra mile for customers, for my team. Like, Hopping in on CS level stuff, you know, like not being just like hopping in on whatever I can. If we need to import data right now and there's manual clicking, like I'm willing to do it. So I'm putting so much time on myself right now that I'm that, yeah, that's really it. In the past I said Elon Musk, but not right now.

AI assessment note: “In the past I said Elon Musk, but not right now.”

Q Um, so fast forward now to like COVID times, right? I heart radio does the living room concert. How do you like pivot your software? It's like you're serving that new use case.

A Yeah. So, um, that's a great question there. Um, there's the, the, the answer is we're fully focused on optimizing for when the industry kind of, you know, Phoenix's or whatever emerges from this time. Um, you know, our, I'm running through scenarios of, okay, if it happens in quarter three, if it happens in quarter four, it happens in quarter one of next year, you know, making sure that we have momentum for when that happens and, you know, not going away on the other, other side, uh, uh, to make, to make sense of it. So once again, we're, our hypothesis is that there is an industry to serve on the other side of this and, you know, fully optimizing and keeping momentum for that when that, when that happens. And during this time, we're taking a lot of, We're taking advantage of the downtime to really improve the products. And a lot of our customers are, you know, tightening the belt and figuring out ways that they can be, they can do more with less and be more efficient. So we're using this time to implement parts of prism that they haven't been able to implement because they've just been moving too fast. So the day to day is relatively normal. I mean, our industry is hurting, so it's scary. But, you know, our customer, our customer success team is spending time getting our current customers, customers more integrated, uh, and our product team is moving faster than ever. And in …

AI assessment note: “we're fully focused on optimizing for when the industry kind of, you know, Phoenix's”