In this episode, we unveil the concept as we emerge from stealth mode. The video is basically a trial run for a pitch to investors later this week through the Founder Institute.

Importantly, though, we aren’t raising money at this stage, just raising awareness.

I would love to hear your thoughts. Comment away!

Transcription:

I am Adam Neary and this is “Confessions of a Startup CEO.” This is Episode 3, “The Pitch.” So I am really excited to present this today because we have been all quiet about our concept. You know, we have been slowly emerging from stealth mode as we complete the branding. We want to let everyone know what the concept is about. In addition we are pitching to some investors later this week trying to raise awareness so we thought it to be a great opportunity to talk about that on this forum.

Don’t hold me by the way, to what we say here.  As we continue to talk to customers the idea continues to evolve as we go. So by the time we hit the marketplace we probably would have pivoted quite a bit. Maybe that will be exciting, to look back at this website to see what you were thinking at this stage. So here it goes…

My name is Adam Neary and I am CEO of a new organization called Profitably. We are a web-based business solution for small businesses with a simple and specific focus, to help small businesses operate more profitably…something everyone needs. This is a huge pain point in the market place around analytics for the small businesses because they cannot do what the large organizations do. They don’t have the time, the analytical capabilities, the processes, or the tools to make informed and rigorous decisions.

BI tools cost millions of dollars and take months to roll out. Management consultants are very expensive…even the cheap reporting tools that are accessible require an incredible amount of domain expertise. You need to know what you are looking for before you can get value out of those tools. As a result of this pain, most of the small businesses are making intuitive decisions on their own. They are forced to fly by the seat of their pants and in many cases they are operating sub-optimally as a result.

Our solution does a lot to solve this problem by providing a very simple sort of like a mint.com for small business. Small businesses log in, connect to QuickBooks, we pull out their data automatically, integrate automatically and perform a proprietary battery of analytics around profitability that they can review.

More importantly, we have a recommendation engine that generates a prioritized list of winning plays, recommendations that they can take action on right now that immediately impacts their bottom line. This is not like you know while you look at this charge and just think about. No when we show you a chart, we show you exactly what you can do to move the needle and that is something that is missing in this place and small businesses they need it. They want it.  So this is something that we are going after.

Let’s take a specific example. We are looking at an HR outsourcing firm, you know 20 million revenue and 60 people in their office, intuitive decision making culture and services-oriented vertical. We pull all their data down and what are the key recommendations that we make, what are the analytics…well, we can start with cost reduction probably those who mostly the low hanging fruits that you spend 10k every year on office supplies. You have got 20 different vendors. Well we have got great with Staples that we pre-negotiated. If you are going for staples then you are going to save 10% and that is $1000 right in the bank. Look at IT hardware same thing, we negotiate the rate with CBW, you are going to buy 6 computers next year. You know use our contracts and you are on your way and cash in the bank. If you want to think a little bit more strategically, just look at your price. So by merging the financial data with the time sheet data, you can start to think about the profitability of their various service offerings, and we discover that three of them are unprofitable. First thing that you can do is just raise the prices so we recommend some prices that would help resolve that problem but they don’t want to raise the prices and they just want to look at the P&L of that service offering a loan and we can show the key cost drivers are where they might be over running, what they can do about those specific you know cost drivers. These are the things that small businesses can get right now and we know when we deliver this it is going to move the needle for them.

So what does the market look like?  The BI Market  globally is about $7.5-8B dollars, but looking at North America small or medium sized business and BI delivered as a service, when you look at that small niche you are looking at about $250M dollars or 240M dollars between Gartner and Forrester, this seems to be the consensus. We have no dominant player in this space, so I think three years out and we would be able to catch probably a third of this market, that is 80 million in revenue that I can just go and get right now and deliver that profitably, but we are also going after a long tail of small businesses that aren’t included in that number. So that really includes the fee base and makes this opportunity very exciting. But let’s think about mint.com for a second, right, their model is totally fee stand point. They make all their revenues based on affiliate revenue. We have that as well because we have the brokers that bring small businesses to different vendors certainly for having brokered that relationship you know we will be able to get the affiliate revenue as well.

We are actually talking to a buying consortium where a lot of these cost reduction savings would come from.  If they negotiated a 14% discount for example for negotiating for an office supply vendor. They will take 2% and we will take 2% and pass 10% on to our customer base for having facilitated that relationship. As more and more of our customers migrate their business to our preferred vendors you will be in a position to negotiate even better savings. So that is a great opportunity and we are really excited about the revenue, but where are we in the process?

Well we have got a prototype already in development nearly done which I am very excited to share with our initial customer base. I have got some hiring going on and I have already mentioned in the previous episode that we are looking for Chief Creative Officer and talking to some handful and I think I have got some great options. I am really excited about that. Some great dialogues have been coming out. I have also been talking to some developers you know couple of CTOs and potential hires…one in particular that I am really excited about. So we are finalizing those hirings and have our initiation team and then we are doing the entire customer development work. We are talking to as many customers as possible because want to scale and we want to grow this business and make sure we don’t have the problem there. That is really what it comes down to and it leads to the big ask right. Any big pitch ends with a big ask.

We are not asking for money right now. We are comfortably boot strapped and will be able bootstrapped through all the customer discovery and customer validation work. We will need money when it comes time to scale and we will be raising cash, when it comes time to scale but that wouldn’t be it until we have the viable product. You know, a customer base and 40% of that paying customer base is saying “hey listen, if you went away tomorrow, you will be devastated”. That is how we know we got the problem solved and so hopefully we will be able to bootstrap up until that point. What I do need though is more customer contacts. We want to hear from more customers we want to hear from more people. So what I would say if you are talking to a cofounder, you know, or CFO in a small organization, you are in a board meeting and maybe you want to ask a cheeky question ask them about their profitability strategy. If they don’t have a profitability strategy then they can talk to me right away and hopefully we can help. If they want to have a profitability strategy with tools are too expensive, and they don’t know to go about it, that is even a better situation. I would love to talk to them and understand what they are doing today. What tools have they tried to put in place and how we can help. So that is the ask and then for you folks I would love to you know give as many comments as you would love to give one the feedback on the page. Things that I should be saying and not saying. We would love to hear what you think because I have been talking to some people later this week. So that is it! “Confessions of a Startup CEO,” Episode 3, signing off. Thanks!