The Exchanges

Q that. I bug the hell out of them. They always get back to me. So I've got you 30% off along with a hundred dollars in free AdWords credit. To grab it, just go to HostGator.com forward slash Nathan, but you gotta do it now. Again, HostGator.com forward slash Nathan. So what, I mean, what would you spend, let's say you get the money, what would you spend it on?

A So essentially right now we've been doing everything with a three person sales team, which is very limited for an enterprise brand. Um, we want to grow our sales team over the next three years to up to 30 people, uh, particularly 20, uh, 20 sales development reps and 10 account executives. Um, we also need a bit more people in our operations, like a COO would be phenomenal just for, for how fast we're producing our products. Um, and finally we want more data science. A lot, a lot of the future of our business hinges upon how personalized and how immediately we can make those experiences. Like when Nathan calls, we want to know Nathan bought something last week. We want to treat you completely uniquely. And there's a big benefit for brands to be, to treat their customers uniquely. They, they spend more, they retain better. Um, and so, so a lot of this bet is to hire more data scientists, uh, and to hire more salespeople to start spending more on marketing. So we've been quite lean this past few years. Because we were, we were developing a new product that actually, we just finished developing like three weeks ago. Um, and, and yeah, so, so now that we have that ready, we want to focus. So a bit on product, a lot of sales, and a lot of marketing.

AI assessment note: “we want to grow our sales team over the next three years to up to 30 people”

Q much of this is still human driven. I mean, my guess is when you set up a new customer, you basically tap into their current support system, immediately index or scrape all of the tickets or support questions that people have already submitted over as long history as you can. And you're using that information to try and codify it somehow to automate stuff in the future. Is that accurate?

A Yeah, that's, that's accurate. Um, And how much can we automate? Look, what I say often is like, uh, Walmart would be a terrible customer for us because they have a million, like a million products. But, uh, if we start looking at businesses that are kind of niche, so for example, like let's just say insurance, or I gave the example order earlier, ordering a pizza, like it's one product. So the, the amount of variations you can have over one certain product is more limited. So we're seeing that we can automate a lot. Like, uh, I mentioned before that we try to, we try to put the bot into production automating between 80 and 90% of the conversations.

AI assessment note: “Yeah, that's, that's accurate.”

Q Make you nervous, or do you actually get excited about that because it's clearly something that can scale?

A I mean, there's obviously, there's, there's a reason to get nervous, uh, but, but I think, I think it's more excited. There's, we basically, one of our focuses for this whole year has been finding a niche in the market. What exactly are we going to do? What are we going to become very good at? And what we're realizing is, is there's a big demand for, for enterprise deals, for a company to come in to really get to know the company we're working with to create a completely custom solution. Uh, and so right now we do have Three, three, probably four by the end of this month clients are paying a lot of money, but I think that number is going to probably double in the next two to three months.

AI assessment note: “I think it's more excited. There's, we basically, one of our focuses”

Q Interesting. Okay, good. So tell us about the company. What was specifically, what do you do and what's the revenue model? Is it pure play SAS?

A Uh, yeah, it's, it's kind of like a funny hybrid of SAS. So what do we do? We work with, um, With customer service to automate, automate customer service and improve customer experience. How do we do it? We develop, uh, chatbots, which is kind of a very common thing, but I guess our, our two differentiators is, uh, we focus exclusively in Spanish. So what we realize is there's millions of, uh, chatbot producers on the market, but in reality, very few of them are being, are able to create Great experiences in any language. Uh, so what we said is, Hey, let's, let's not try to do 10 languages at a time. Let's just start with one. Um, and right now, basically our market niche is focusing in Spanish for companies that have customer service needs. Um, where we're basically automating anywhere between 80 to 96 in our most successful case of the customer service requests that a company gets.

AI assessment note: “it's kind of like a funny hybrid of SAS. So what do we do?”

Q Got it. So, 1.4 million United States dollars raised, team of three co-founders, plus kind of one late founder launched in 2015. Um, the, uh, give us a sense, I mean, what are the key metrics you're tracking inside the business to determine how successful you guys are?

A So basically our key focus right now is, uh, we look at two things. One is obviously how many customers are closing. Uh, and the second thing is how much, uh, automation we're, we're able to create basically. Um, and so by automation, I mean like how exact are our bots basically once they go, once they're implemented, how much do they actually understand? And we, we try to keep the bots like between. It's a big difference because it depends a lot on the use case of, of understanding of the orders. So if they can automate like 80 to 90% of the conversation, We consider that we're doing a phenomenal job. And, uh, and our focus for this year is to close basically the biggest amount of clients we can. Uh, we have a lot of very interesting commercial deals, uh, like in the pipeline. So yeah.

AI assessment note: “our key focus right now is, uh, we look at two things.”

Q Okay. That's great. That's good. Are you, have you dialed in kind of CAC yet, or is it still too early? What are you willing to pay to acquire a customer?

A We, we haven't dialed it in. Uh, basically what we know is that we can go pretty high, uh, specifically for the market. So, so, um, so, I mean, just, Like with this new model of these bigger customers that we're going in at, which are yearly, yearly contract values of a hundred K, we could pay easily 10, 10 to 20 K. Where would you, where do you spend that money to acquire those customers? The thing is, we're not really spending it now. Most, most of our sales are coming in. Um, we have an outbound sales team, which is, uh, three people basically. Uh, and they're, they're acquiring most of the customers. We're doing very little on marketing. Uh, and basically right now outbound is working. So We're trying out like a bit of inbound marketing. We're not spending too much money on it.

AI assessment note: “We, we haven't dialed it in... we could pay easily 10, 10 to 20 K.”

Q Got it. Okay, good. So those will be spinning up in the next one or two weeks. Now, why are you switching away from that model when they, when they haven't even gone live yet?

A So basically we, we, we, we have been trying for a long time to make this, uh, it was, it's basically, it depends on technology. So initially we were looking at just to develop a bot. It was going to be like a very high production cost for us. And, uh, we were able to, so I'm going to go a bit technical here, but basically what we were trying to do at first is develop this AI specifically for that business. So let's just say you come in and we're going to develop this, uh, this ocean of, of knowledge, uh, of how your customers only speak to your brand. Uh, obviously the end goal here was always to be able to develop like this, this more universal AI and then be able to like, uh, license it off, license it off as a software as a service. But when we first closed these customers, that was still far off in terms of technology. Now what we're doing is we're creating this This massive, like ocean of knowledge, just to say it in one way. And then, uh, when, when we close a new customer, he taps into that, to that information. So before, instead of having like this own AI that only works for business A, we have like this, this AI that works with all the businesses we sign. And then all the businesses have, uh, we'll just tap into it. And this is beneficial both to the consumer and to us in the sense that the consumer, it becomes way cheaper to develop. And secondly, the way we see it …

AI assessment note: “It was going to be like a very high production cost for us”

Q Yeah. Do you have to do that? I mean, can you get, I mean, it's a lot of dilution. Is there some, do you really need five million dollars to drive growth?

A That's a great question, man. I mean, we're, we're obviously looking at alternatives. We're looking at, um, at, um, uh, financing as well. We, we found an interesting company, um, which I won't disclose anymore just cause I'm, I haven't run it through them, but they're, they're quite interesting in financing a lot of the contracts. So we have, Uh, more than a million dollars in contract, and you're like, look, for that million dollars in contract, if you give us a, a 20%, we'll, we'll give you an additional million dollars of, of direct financing. Um, and it's not an equity realm, so that could be interesting. Um, but in general, look, we want to push to grow. We understand that our business right now is very healthy, and if we hit the growth target that we think we conservatively could hit, our next round would be a, a very big round. We, uh, we expect to reach seven to ten million dollars on any recurring revenue with this round. So, so we also have a prompting upside.

AI assessment note: “we're obviously looking at alternatives. We're looking at, um, at, um, uh, financing as well.”

Q Oh God. Okay. Well, what's net? What's net? Okay. So, I mean, you're about break even then.

A Yeah. Basically about break even. Uh, I mean, right now when I'm saying 50, I think that's 50 with the close of this month. So basically our focus right now is reaching, uh, break even. And, and we want to focus internally on making this company a bit healthier, uh, manage. So, so basically we have a very scalable business model right now. What we need to do is manage our costs. Uh, and we want to keep on growing. Uh, but I, I guess the way we're looking at it now, we're not looking to triple down on sales. Um, I think we're going to have, once we reach break even, we're going to have a reflection period, see what type of costs we need to have, see what costs we can.

AI assessment note: “Yeah. Basically about break even. Uh, I mean, right now when I'm saying 50”