When social media management tool Kontentino first launched in March 2016, it had some pretty powerful backing. Originally developed as an internal tool for a leading ad agency in central Europe — and still co-owned by that agency — Kontentino got its first 100 customers simply through word of mouth and cold sales.
Scaling, however, has been a different ballgame.
Since 2019, Kontentino has grown 38%, hitting $128,000 in monthly recurring revenue in 2020. The company has an 18% annual churn rate, but has a net revenue retention of 100%, thanks to a 15% to 20% expansion rate.
Kontentino’s growth in recent years has been due to a “360-degree approach to performance marketing,” according to Konstentino CEO and co-founder Bohumil Pokstefl. Since last year, the Kontentino team — 17 full-time employees and 15 contractors — has doubled down on search engine optimization and paid social media ads.
When it comes to a winning paid social formula, Kontentino is working out the kinks as it goes.
“We started [running ads] in January and February, and our customer acquisition cost was $291,” says Pokstefl in an interview with Latka. “Right now, it’s over $800. So we’ve more than doubled the expense of our CAC. We’re trying to solve this.”
Source: GetLatka
With each customer bringing in an average $130 to $140 a month, it takes Kontentino about six months to recover their CAC. Pokstefl hopes those numbers will change as the economy adapts to COVID-19, but he’s not discouraged. With 950 customers and $200,000 in the bank, he plans to continue investing in growth.
“There were a couple of months where we had a negative growth rate, so we played it safe,” says Pokstefl. “Now, we’ve prepared several modules we’re planning to launch, and we’re going to just boost it and boost it and boost it. We’re trying to focus more on paid ads on social media, and we’ll see how that will pay off.”
What is Kontentino’s annual revenue?
In 2020, Kontentino generated $1.5M in ARR.
What is Kontentino’s monthly revenue?
In 2020, Kontentino generated $128,000 in MRR.
Who is the CEO of Kontentino?
Bohumil Pokstefl, age 29, is the CEO of Kontentino.
Transcript Excerpts
Working in a COVID-disrupted field
“There have been a lot of changes to the market. The advertising agency world shattered into pieces. Many of the bigger agencies or bigger clients now have smaller teams. Brands are laying off agencies and trying to do everything in-house, so the teams are much, much smaller. So we think that this might also affect the CAC and also the average sales price we are having right now.”
Getting started with cold leads
“[We started by] just knocking on doors. We were lucky that we started from the advertising agency — they’ve got a lot of connections in Slovakia and Czech Republic. Basically, we already had some case studies with the clients of the agency, and we just went door to door: showing them the product, explaining the value and the unique selling points. We got our first early adopters, and we’ve been in touch with them ever since.”
Sales teams aren’t always the answer
“We have one ‘hunter’ and we’re hiring a second one… but most of our sales are basically ‘farmers.’ We have a customer success team who are qualifying incoming leads and incoming registrations, and then working with them. Since our average revenue per account is kind of low, we’ve been trying to do cold sales, but it’s not worth it.”
The key to successful entrepreneurship
“It’s not about ideas — it’s all about execution.”
Full Transcript Nathan Latka: Hello everyone. My guest today is Bohumil Pokstefl. Studied Innovation Management and Marketing in Denmark and in the US. After his studies, he was invited to launch a social media tool and developed a leading ad agency in Central Europe. In less than four years, he and his team have built a tool with more than 4,000 brands and agencies on board, such as IKEA, BBDO and VML. He’s on the Forbes 30 Under 30 list, and became Founder of the Year in Slovakia in 2019 with his company Kontentino. Bo, are you ready to take us to the top? Bohumil Pokstefl: Yes. Let’s do that. Nathan Latka: All right. So everyone wants to know what is Kontentino? What do you guys do? Bohumil Pokstefl: So we’re a social media tool which helps marketing teams, advertising agencies and brands to collaborate and plan social media content. So we are like Buffer and Assana would have a baby. Nathan Latka: Yep. I love that analogy, Buffer and Asana have a baby. Okay. And when did you launch the company? Bohumil Pokstefl: March 2016. It was the official launch, but before that, we got some MBPs ready. It was basically a spin off of an internal… It was an internal tool of one of the leading central European advertising agencies. Nathan Latka: And let’s start with where you are today and then go capture your story. So today, what is monthly recurring revenue? Bohumil Pokstefl: It’s €110,000. Nathan Latka: €110,000. Okay. And where were you exactly a year ago? Do you remember? Bohumil Pokstefl: That’s a very good question. It was about €80,000. Nathan Latka: Okay. Got it. [crosstalk 00:01:35]- Bohumil Pokstefl: Something like that. Nathan Latka: Got it. So €110,000 is the equivalent of about $130,000 up from $93,000 about a year ago. So, healthy growth. Walk me through, I mean, why are people signing up for this? How are you getting new customers monthly today? Bohumil Pokstefl: It’s through various channels. I mean, we have 360 approach. It’s basically performance marketing. We started to focus on search engine optimization past year. And that’s actually a good question. It’s actually a challenge right now to acquire new customers. Just give me a second. I’m going to turn off my phone. Nathan Latka: Take your time, man. No worries. The beauty of live interviews. It’s how it works folks. Bohumil Pokstefl: Exactly. Nathan Latka: That’s how it works. Bohumil Pokstefl: It’s worse than when you’re in theater then your phone rings. Nathan Latka: It’s no problem. So [crosstalk 00:02:35]- Bohumil Pokstefl: Same awkward moment. Nathan Latka: So you’re doing about $120,000 a month right now, which is about a $1.5 million run rate, have you done this all bootstrapped? Bohumil Pokstefl: Yes. Yes. Nathan Latka: Oh, wow. Bohumil Pokstefl: Still bootstrapped, still profitable. Nathan Latka: We love that. How profitable? How much to the bottom line each month? Bohumil Pokstefl: Each month, well, now we’re where it varies, we were on the rollercoaster in the past few months, but right now in the bank we have around €200,000. Nathan Latka: Okay. As a founder, how do you decide how to invest that capital? Do you pay it out to you and your team as dividends? Do you reinvest it? What do you do? Bohumil Pokstefl: We reinvest. And right now we let it sit. We were kind of cautious because the coronavirus situation was kind of challenging. And there were a couple of months where we had a negative growth rate so we played it safe. And right now, we prepared several things and several modules we are planning to launch. And for that, we’re going to just boost it and boost it and boost it. We’re trying to focus more on paid ads on social media, and let’s see how that will pay off. [crosstalk 00:03:52]. Nathan Latka: How many customers do you do currently have Bo? Bohumil Pokstefl: It’s over 900/950 accounts. But with that one account, there can be several agencies or several brands. Nathan Latka: So what does that mean? The average customer is paying you like $130, $140 a month? Bohumil Pokstefl: Yes, exactly. Nathan Latka: Yeah. Interesting. Take me back to the 2016 launch. How did you get your first 100 customers? Bohumil Pokstefl: Just knocking on doors. I mean, we were lucky that we started from the advertising pages. They’ve got a lot of connections in Slovakia and Czech Republic. Basically, we had already some case studies ready with the clients of the agency, and we just went door to door and showing them the product, explaining the value, the unique selling points. And we’ve got our first early adopters and we’ve been in touch with them ever since. Nathan Latka: Was this your own agency? Do you own the agency? Bohumil Pokstefl: No. The agency is on the market for over, I think, over 15 years. And I’ve just got invited to try to sell and launch this product Kontentino, so [crosstalk 00:05:11]- Nathan Latka: How did you spin it out of the agency without the agency taking a bunch of equity? Bohumil Pokstefl: I’m sorry. Nathan Latka: How did you spin the product and the code out of the agency without the agency taking a bunch of equity? Bohumil Pokstefl: They still have a bunch of equity. Nathan Latka: How much? Bohumil Pokstefl: It’s still a majority. Nathan Latka: Okay. Some more than 50%? Bohumil Pokstefl: It’s more than 50%, yes. Nathan Latka: Do you regret anything about that? Bohumil Pokstefl: To be honest, we are supposed to have a negotiation and discussion regarding this topic within a few months so let’s see how that goes. But of course, it’s a tough topic, especially my focus is my company basically, and happiness of my employees and of my clients, so we’ll see how the talk will go. Nathan Latka: Yeah. How many folks are on your team today? Bohumil Pokstefl: 17 working internally in-house and another 15 people is working externally. So we’re usually service providers. Nathan Latka: Okay. And how many engineers? Bohumil Pokstefl: Six, hiring another two. Nathan Latka: Okay. And any quota carrying sales reps or no? Bohumil Pokstefl: Oh, we have one hunter, hiring a second one, and most of our sales are basically far more. So we have more like customer access team who are qualifying incoming leads, incoming registrations, and then working with them. Nathan Latka: So no quota though? Bohumil Pokstefl: No, no. Since our average revenue per account is kind of low, we’ve been trying to do cold sale but not working. Nathan Latka: Yeah, it makes it tricky. At this price point too, churn can also be an issue. What is your gross revenue churn per month? Bohumil Pokstefl: Gross revenue churn. I’m not sure if I going to have this one, but our monthly churn rate is 1.5% past three months. The average is 2.5% this year. We’ve got 7% monthly churn rate in April that was kind of tough, but they got back. They reactivated over a few months. Nathan Latka: So you’re doing something like %18 to 25% annual churn? Obviously COVID was a little bullet. Bo, do you have an obvious way to drive expansion revenue or no? Bohumil Pokstefl: Expansion revenue, I didn’t really calculate that. Nathan Latka: Do you upsell anything to your customers after they initially sign up or no? Bohumil Pokstefl: On average, we have a €1,000 MRR every month. Nathan Latka: You have what MRR? Bohumil Pokstefl: A €1,000 each month on upsells. Nathan Latka: Oh, okay. Got it. That’s like %15 to 20% expansion revenue annually. So your net revenue retention is something like a 100%? Bohumil Pokstefl: Yeah. That sounds right. Nathan Latka: Yeah. Interesting. You mentioned testing paid spend walk me through that. I mean, do you have a good barometer in terms of what your customer acquisition cost is today to get a new $130 a month account? Bohumil Pokstefl: Yes, that’s a tricky. We started in January and February, we still kept it on… the CAC was €350 and right now it’s over €700. So we more than double the expense on CAC. We’re trying to solve this. There have been a lot of changes on the market. The advertising agency world shattered into pieces. Many of the bigger agencies or bigger clients, we see the trend that they’re having smaller teams or the brands are just laying off the agencies and they are trying to do everything in-house so the teams are much, much smaller. And we think that this might affect also the CAC and also the average sales price we are having right now. Nathan Latka: Yeah. Well, you’re going through a fun time. We’re rooting for you when your equity negotiation comes up. In the meantime thought, Bo let’s wrap up with the famous five. Number one. What’s your favorite business book? Bohumil Pokstefl: Well, right now I still think that’s a Predictably Irrational from Dan Ariely. It’s still all the fun. I always go back to that book. Nathan Latka: Number two, is there a CEO you’re following or studying? Bohumil Pokstefl: Right now, Tom or Tim Keiser? The new Hootsuite CEO. I’m really observing this gentleman, what he’s going to do with the [crosstalk 00:09:53]- Nathan Latka: Would you sell to Hootsuite if they wanted to buy you? Bohumil Pokstefl: Depends. But I admire what Hootsuite is doing and it would be a fun merge. Nathan Latka: Yeah, if your equity negotiation in a month or so doesn’t go well and you guys decide you and the agency that you want to sell the company, would you look at taking sort of offers in the sort of three to five million range? So it’s about two and a half to four X your current ARR. Bohumil Pokstefl: I mean, sounds reasonable. I haven’t given thought about that. Nathan Latka: So you wouldn’t sell, even if you get no more equity? Bohumil Pokstefl: It really depends. I would like to keep it more private. Nathan Latka: Yeah, I mean again, the value of the show is sort of trying to bring these issues out, right? Because everyone goes through these, everybody, but no one wants to talk about them. So I’ll respect your request not to push harder there. I think you’ve already given us a lot of good stuff to learn from. So number three, what’s your favorite online tool to build Kontentino? Bohumil Pokstefl: I really love Intercom, even though I’m kind of mad on them from time to time. I think that they are trying to really make a wider approach and forgetting about the niche and Pipedrive. We are implementing Pipedrive right now. I’m really excited about that. Nathan Latka: Number four. How many hours of sleep are you getting every night? Bohumil Pokstefl: Eight Nathan Latka: And situation married, single, kids? Bohumil Pokstefl: Single. Nathan Latka: Okay. And how old are you? Bohumil Pokstefl: 29. Nathan Latka: Bohumil Pokstefl: I think that I wish I knew that it’s not about ideas, it’s all about execution. Nathan Latka: Guys, there, you have it. Kontentino doing about $93,000 a month a year ago now doing over $128,000 a month, or about a $1.5 million run rate. They have over 950 customers, $200,000 cash in the bank, so he’s ready to make investments and double down on growth. Team size is 17 full-time, 15 contractors, six full-time engineers but scaling. About 18% annual revenue churn and another 18% of expansion. So a 100% net revenue retention. Spending 750 bucks to get new $138 a month customer so about a six month payback period there. Bo, we’re rooting for you man. Thanks for taking us to the top. Bohumil Pokstefl: Thank you so much. It was a pleasure. Nathan Latka: One more thing before you go, we have a brand new show every Thursday at 1:00 PM 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 backend dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1:00 PM Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2:00 PM Central. To make sure you don’t miss any of that, make sure you click the Subscribe button below here on YouTube. The big red button, and then click the little Bell Notification to make sure you get notifications when we do go live. I wouldn’t want you to miss breaking news in the SAS world, whether it’s an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don’t want you to miss it. Nathan Latka: Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B 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 @nathanlatka.com\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. And if you enjoyed it, click the Thumbs Up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them 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 you.
