How did a startup SaaS serving event venues and artists manage to survive the global pandemic? “I thought you guys were toast,” quipped Nathan Latka in this latest GetLatka interview with Prism.fm CEO and Founder Matt Ford. Prism.fm helps event venues organize with artists to collaborate on various show types. According to Ford, “Prism helps unf*ck the live events industry.” Discover from the Founder what one factor allowed Prism to survive COVID, how he perceives funding now as he flirts with profitability, and where he sees his next revenue stream.
- Team of 27 with 17 engineers in Austin, Detroit, and International
- 300 customers with NCA ACV of $11,000
- $5m Series A funding round in 2021 to fuel growth
- 5X growth post-pandemic
Launched in 2018, 14 months before global pandemic hits
Latka kicked off the interview by recounting the conversation with Ford in 2018: “When you came on, you were doing $15m in revenue. How did you survive and make the company sustainable in COVID?”
The CEO bluntly replied, “Our timing was miraculously good. At the end of 2019, we raised a $2.9m extension on our $1m seed in 2017, so going into 2020, we had $2m in the bank.” He added, “We scaled back to a bootstrapped team then.”
Mitigated churn, retaining 100 of 120 customers by the end of the pandemic
According to Ford, COVID and funding “Allowed us to keep 4 full-time engineers and 3 part-time customer success people.” He explained, “Our product development is stronger now because we were going in the trenches to help our customers. That helped us on the other side of the pandemic and accelerated our impact on the industry.”
COVID MRR drops to $50k, jumps 5X to $200k post-pandemic
“We definitely took a hit during COVID,” the Founder shared, as their monthly revenue dipped to $50,000. “However, we actually 5X’d our growth afterward,” the CEO added, as their monthly revenue soared to $200,000, “We did not churn a lot: of the 120 customers we had before COVID, we kept 100 after.”
Evaluating “realistic” SAM vs. TAM, NDR at 110% on 300 customers
Ford admitted that he’s “become more rational about how big the TAM is,” but sees Prism in a good position today, sharing, “We’ve been 3 years in market if you take away pandemic. Prism has a really solid product-market fit and negative churn.
Plus a positive net retention of 110 across the whole customer base.” He further reflected, “Over time, we have become more rational about how big the TAM is. We are more realistic about the SAM vs. the TAM. It’s quite obvious that this biz should be sustainable.”
Exploring payment processing on $500-800m GMV
“Prism works both sides of the live music industry. One side is venues and promoters, and the other is talent agencies that represent the artists,” the CEO explained.
“Working with both sides helps with data transfer. If both are working on Prism, they eliminate a lot of data entry around the event. It’s an enhanced, efficient show that gets planned. It’s an enhanced benefit when you work with others using Prism. That’s a big part of our strategy,” Ford revealed.
He added that they’re looking at adding payment processing to the platform, then exploring what other customers they can expand to, noting that the potential based on their current customer base was $500m GMV last year, projected to hit $800m this year.
1-2% potential take rate based on market propensity
While Latka lit up at the potential for take rates on $800m GMV, Ford pumped the brakes, asking, “Do we have the right to be the one that facilitates the payment?
We are already helping people around payments. Currently, they contract, schedule, track in Prism, then go into a bank account to pay.” But he added, “What propensity does the market have? Now they’re sending ACH and wires for FREE, $20 monthly, or a $20 payment.”
While the CEO is excited about the potential, he realizes that he must deliver value beyond efficiency and organization to justify even a 1-2% take rate. “But,” he surmised, “It would be a strategic moat for us to be the facilitator, and there are enough payments to make the opportunity exciting.”
Targeting $15m ARR at end of 2024, flirting with profitability, “raising for opportunities, not need”
Look ahead, Ford envisions a bright future where Prism passes $15m ARR by the end of 2024. “We are in a healthy place right now, coasting to profitability. It feels good, and we have a clear runway to get to $15-20m ARR,” shared the Founder.
He further explained, “If we explore other revenue streams from a place where the core business is profitable, then we don’t have to fundraise to avoid layoffs. We have a good group of people who love what we are doing and a customer base hooked on our product innovation. We can raise for opportunities instead of need, which is extremely exciting.”
Ford hinted that they may soon be doing a fundraising bridge, adding, “We’ve had opportunities to raise larger funds, and we said no. We are trying to dilute less.”
Founder dilution concerns addressed with an equity stake of 30-50%
Latka queried Ford on how he views founder dilution today. “When we got our Series A in 2019, we grew the business quite a bit, even though we had a decent dilution in that round.”
The thoughtful Founder added, “It would be great to own more. But this is the furthest I’ve ever taken a company. I own an asset that grows directly with how much I succeed. I am in complete control of my most valuable asset.” He revealed he is the sole Founder, as his other co-founders exited by being bought out or buying their equity.
Favorite Book: CEO Matt Ford chose The Alchemist by Paulo Coelho as his current favorite book.
CEO he’s following: “I’m super happy for Sam Altman at Open.AI, and what it has cracked opened,” Ford replied, adding, “I’m not going for the rollercoaster; there’s an amazing amount of noise in the signal of what AI is, but Open.AI has clearly done something significant and interesting. We will see where it goes in the future. But if it doesn’t go anywhere besides what it’s already done it’s extremely impressive.”
Favorite online tool: Ford named Camtasia as his favorite current tool, “Lately, I’ve been doing marketing myself, and I use Camtasia to chop us live recordings.” Nathan chirped, “Whoa! That’s old-school, Matt!”
Balance: Ford sleeps a full 9 hours per night. He is 34 and is not married (yet) but is currently in a relationship and has one child (so far).
What does he wish he had known at 20? “I wish I had known the importance of wherewithal, positive attitude, and willingness to persevere in challenging times,” revealed Ford.