Micro-Influencer Marketing Platform Trend Focuses on Scaling, Increases MRR to $60,000

Nathan:

Hello everyone. My guest today is Ramon Berrios. He’s building a company called trend.io and was born and raised in Puerto Rico and now is living in Denver, Colorado. Ramon, are you ready to take us to the top?

Ramon Barrios:

Yes, sir. Let’s do it.

Nathan:

All right. What is trend.io?

Ramon Barrios:

We help consumer brands connect with micro influencers so they can scale user generated content.

Nathan:

Okay. And so give me an idea here of like the kinds of customers you’re serving.

Ramon Barrios:

Yeah. So CPG, fashion, beauty, all of these brands need to generate content for their paid advertising. User generated content tends to convert really well. Studios are expensive and micro-influencers having to be great content generators, which make it affordable and scalable for these brands who produce content.

Nathan:

So one of the things that is always tricky about this space and these sorts of platforms is attribution, right? Can the brands actually measure the influencers that they’re finding through trend and are the influencers actually driving a return? How do you solve that issue?

Ramon Barrios:

Absolutely. So that’s not what we do. We just help them source the micro-influencers to generate the content and all the attribution is done through whatever channels they’re leveraging that content with. So whether it’s Snapchat ads, YouTube ads, Facebook ads, or Instagram ads specifically. So we’re just a place to create the connection and facilitate the process and management.

Nathan:

I see. And help me understand sort of pricing. What’s the average company paying to use you?

Ramon Barrios:

Anywhere from 2000 to about $10,000. So it’s a self-service marketplace. We’re usage based pricing. In the past, we were your traditional SAS model, but we noticed that that wasn’t going to work well in the space just from trial and error.

Nathan:

Mm-hmm (affirmative). So that’s 2000 a month or a year?

Ramon Barrios:

No, sorry. We’ve been with this revenue model for about six months now, so our average lifetime value right now is around the 2000 range so far.

Nathan:

Yeah. But lifetime value over what? So over what period? What’s the average customer paying you per month would you say?

Ramon Barrios:

Per month? It really depends. Some stay active monthly, some don’t. So I would say about $1000.

Nathan:

Okay. A thousand ish. And how about how many brands are you working with?

Ramon Barrios:

Right now, we are about to hit 200 brands in the marketplace.

Nathan:

Okay. And how many of them are actually paying?

Ramon Barrios:

All of them are paying, but some of them pay every month, some of them just say, “Hey, we’re going to take a break for three months. We’ll see you later.” And they can come back. So you can look at it as like a vetted Upwork where they just activate a creator whenever they need it.

Nathan:

So over the past 30 days, how many companies paid you at least a dollar?

Ramon Barrios:

Probably close to 60.

Nathan:

Okay. Got it. So at any given time you have caught between like 20 and 30% of these companies active. Interesting. I imagine that’s a key growth driver for you, right? What sorts of things are you doing to reactivate these brands that maybe used you a year ago and haven’t used you since?

Ramon Barrios:

For sure. So when we looked at this space, we saw that every company in the space was investing in a sales team and we couldn’t compete with that. So we instead invested in the product. So we got rid of the sales team, we invest 100% into the product, so customer success, campaign templates, examples of other brands. And then we have incentives for discounts based on how many credits you purchase on bulk. That incentivizes the brands to get an account manager and get 10, 20% discount for credit if they purchase bulk.

Nathan:

How does a credit tie to number of pieces of content they’re getting from your micro-influencers?

Ramon Barrios:

Yeah. So all credits are standardized or $100. And that gets you a post from the micro-influencer under your social, but you also get the video or the image with licensing and distribution rights. So right now you get one piece of content that you get to review before you get to download it with licensing and distribution rights.

Nathan:

Okay. So over the past 30 days, these 60 brands that have paid you an average of $1000, they were eating about 10 pieces of content at a hundred each from 10 micro-influencers you’ve found for them.

Ramon Barrios:

That’s accurate. Yeah.

Nathan:

I see. And does your system also handle things, just like laws, the micro-influencers like they give… it’s a work product the business can use the video that the influencer creates in future ads and things like that with no legal repercussions?

Ramon Barrios:

Correct. Yeah. So that’s why businesses pay us because of course you can do this in house, but then you have the legal aspect that, “Hey, you’re going to try and save $1000 to actually spend more time doing this and potentially not have the documentation, to have repurposing rights.” Also, Trend is the liable party in between, so it relieves the brand from, “Hey, we’re good to use this on other channels.”

Nathan:

What is that liability? If someone was trying to do this direct, what sorts of documents would they have to get signed by every micro-influencer?

Ramon Barrios:

Well, the thing is it’s not a complicated documentation, but then the moment that you tell an influencer, “Hey, what’s your rate? Oh, by the way, can I also get the content?” They’re going to say, “Hold up a minute. That’s an extra price for that.” And then you have to add that to the document and it just delays the time it takes to activate an influencer with of course, sending a document to each, whereas with Trend, they’ve already applied, approved that in our terms of service as we make that clear when they joined.

Nathan:

And what’s your team size today? How many folks?

Ramon Barrios:

Five people.

Nathan:

Five. How many engineers?

Ramon Barrios:

They’re all contractors. So we have three different contractors who work with. We have our web, we have our iOS and then we have our website as well, so all of those contractors.

Nathan:

So three contracted engineers, and then two, I assume one of those two is you on marketing and sales and growth.

Ramon Barrios:

Yeah, that’s me. And then my partner designs the whole platform and manages the developers. So everything has been designed by him.

Nathan:

Great. Have you raised additional capital? Last time we spoke, I think you said you raised about 750 grand.

Ramon Barrios:

We haven’t raised since we last spoke.

Nathan:

Got it. So $700,000. You were burning at that point I think about five grand per month than you were doing… I think you told me something like 20 or 30 grand a month in revenue. Have you got to profitability today or at least break even?

Ramon Barrios:

No, we have not. We are burning right now anywhere from 20 to 30, but what we notice is what we changed was that we moved the sales team, so now we know that once we pass the 150k MRR, 150k a month in transactions, we don’t really need to spend more from there. So it hasn’t been our focus right now.

Nathan:

Mm-hmm (affirmative). So can I take 60 enterprise like business accounts that have paid you about a grand over the last 30 days, so you’re getting about 60,000 bucks in MRR currently? And so if you’re investing and kind of burning about 20 grand a month right now today, I mean, what are you burning it on to get to $150,000 a month in revenue?

Ramon Barrios:

Well, we acquired all our customers through content marketing and email marketing and as you know, content marketing is slow. So we’re now trying to spend money to actually acquire customers through paid acquisition channels. And then the development of the platform, the rest goes to that.

Nathan:

Where did you find your contractors? There are so many resources find developer contractors and there’s varying degrees of quality.

Ramon Barrios:

Yeah. So one of them, we actually met over in Austin at Capital Factory, who managed this couple of developers in the Philippines who are great. The other guy who manages our iOS, who developed our initial iOS app, my partner exchanged 500 hours of design with him in order to get our V1 for free. He said it was-

Nathan:

500 hours?

Ramon Barrios:

That was like a $100,000 for free, but he still says it’s one of the worst decisions he’s made.

Nathan:

Yeah. It’s like two fifths of a year if you’re working 40 hour weeks. Wow. Interesting. Okay. Talk to me about the content marketing strategy. So your big organic keywords right now are terms like macro influencers, most successful Shopify stores and this thing called Kohl’s, which I have no idea what that is.

Ramon Barrios:

Yeah. So key opinion leaders that’s been taken off in China, and now it’s taken over here where it’s like, “Hey, it’s not just an influencer. It’s actually someone who is entitled to give an opinion on this specific product, because they’re an expert on that matter.”

Nathan:

Do they have to actually be an expert or they’ve just branded themselves as an expert? Like if it’s a doctor, is it like a celebrity doctor, like Dr. Phil or is it like a real doctor out of Harvard?

Ramon Barrios:

It could be like a real doctor out of Harvard who has the credibility to speak up on a product or something like that.

Nathan:

Okay. So it’s more about credibility versus reach because very rarely are those two things the same today. There’s a lot of people that have a lot of reach, but very little credibility. They’re not actually a doctor. There’s a lot of very smart, good doctors that have no voice.

Ramon Barrios:

Correct. Exactly.

Nathan:

Who are you appealing to though? The one with no audience, but a real doctor, or the one that has a lot of audience because they can drive your brands, real new customers?

Ramon Barrios:

Yeah. So in that case, it would have to be the ones that have an audience to be able to drive customers. In our case, we saw that there was a lot of opportunity in that keyword and we just went for it, but the Shopify one is the one that’s crushing right now.

Nathan:

Mm-hmm (affirmative). Interesting. Okay. So that’s a keyword that you were ranking for and what is your content strategy look like right now? I mean, are you hiring someone full time? Is it agency based? How are you doing it?

Ramon Barrios:

Yeah, so we have a January team who manages our writers, who are contractors and subject matter experts. We have our keyword strategy and topics and that changes dynamically. Well, we just assign it to them and somebody on our team is taking care, making sure that all that content is keyword optimized. And then we publish weekly along with our podcasts, which has now ranked pretty high in the DTC category, so that is starting to do really well. Yeah, that’s our content strategy.

Nathan:

Was Kevin Lavelle and Mizzen+Main one of your guys’ customers or do you in this case, study just based off you analyzing their stuff?

Ramon Barrios:

Oh no, they were one of our customers. We worked with Mizzen+Main. They publish content, they generated content on Trend and then they were running that content on paid advertising.

Nathan:

To me, that sounds like you are sitting in the middle. You do have to measure attribution if they’re uploading content and then running paid via Trend right?

Ramon Barrios:

Yeah, absolutely. I mean, the only way for us to be able to attribute that is plugging into these other platforms where the content is being leveraged via API, but it’s challenging enough right now, especially with limited capital to be able to grow a marketplace on both ends and continue to optimize in the technology. So we know we’re going to get there, but even right now, it’s big enough of a value prop for brands that we’re able to do this very efficiently, affordably and in a scalable way.

Nathan:

Now Kevin spent a lot of money getting some big names behind Mizzen+Main early, JJ Watt for example. How important is it for brands that pay you to have sort of a celebrity that they pay a lot for as like their key influencer? Doesn’t that make a bunch of other influencers much more likely even via Trends to sign up, to promote Mizzen+Main?

Ramon Barrios:

Yeah, absolutely. We focus on micro-influencers, but we vouch for brands to also work with [inaudible 00:11:43] if you will, because if you have a white label CBD brand with just a sticker on it with an Instagram that has three pictures on it, likelihood it’s not that people aren’t going to want to work with you and we would love to take your money, but we know it’s not going to be a fit. So the more social proof you already have, the more it’s going to organically want to have people work for you with you paying less and giving out less.

Nathan:

Should I be using Trend? One of things we do with our magazine, you can see it behind me, we ship this thing out now to like 10,000 CEO’s every month. And I send an email out, it just delivered to a bunch of doorstops I said, “Hey, you check your mailbox. You just got your magazine. Take a picture of yourself, holding the magazine and I’ll shoot you like a surprise as a result.” And this morning I woke up to like loads of people posting selfies, like entrepreneurs with the magazine and it’s driving a bunch of sales and now I’m going, “Well, crap. How can I even like drive this even bigger?” My Instagram is verified, beautiful blue checkmark, Get a lot of engagement. I mean, should I be using Trends to sell more copies of the magazine?

Ramon Barrios:

So if you were to use Trend, you probably have to focus on influencers are starting out their own business, especially with COVID it’s a good time because they’re all trying to diversify income. So I would say, yes. It would work for that. However, we focus more on lifestyle products. If you came to us and said, “Ramon, I need SAS micro influencers.” We’re probably going to have to pass because it’s not the medium for our network.

Nathan:

What is the equivalent of you, but for people thinking about side hustle or moms launching businesses from home or a college grad that wants to start their own business, who’s like the equivalent to trend.io?

Ramon Barrios:

So we do take on those business. We have a bunch of moms that are starting out their own businesses, but they just have to be products in food, fashion, beauty, CPG because that’s what our audience is likely to be a better fit for in terms of creating content. But we do work with brands that spend $500 every three months and we work with brands that are spending $10,000 every month.

Nathan:

But who should I work with? I’m asking you like friend to friend, if you’re saying that you’re not a fit for me to get money through, who is the equivalent to you that I should put money through knowing that I want to sell more magazines to founders?

Ramon Barrios:

Yeah. To be honest with you, in your case, it would probably be best to kind of like copy model what Trend does using an air table template with a freelancer who just manages that process because most platforms have crazy software fees.

Nathan:

Yeah. That makes sense.

Ramon Barrios:

We don’t have any software fees.

Nathan:

Okay, cool, man. Let’s wrap up here with the famous five. Number one, what’s your favorite business book?

Ramon Barrios:

Principles by Ray Dalio.

Nathan:

Number two, is there a CEO you’re following or studying?

Ramon Barrios:

Well, the chairman I’m following right now is Charlie Munger. I’ve been reading a lot of her stuff lately.

Nathan:

Number three, what’s your favorite online tool for building your company?

Ramon Barrios:

Favorite tool? Active Campaign.

Nathan:

Number four, how many hours of sleep do you get every night?

Ramon Barrios:

Seven to eight.

Nathan:

That’s good. And what’s your situation? Married? Single? Kids?

Ramon Barrios:

Co-living with girlfriend.

Nathan:

Okay. And how old are you?

Ramon Barrios:

28.

Nathan:

28. Last question, man. What do you wish your 20 year old self knew?

Ramon Barrios:

That the most efficient and best decisions stem off of principles rather than theory.

Nathan:

Guys, there you have it, Trend.io, connecting micro influencers with brands. They have about 250 on the platform. At any given 30 day period, 60 brands are putting about $1000 through the platform. They’ve grown from about $25,000 a month back in late 2018 to now about $60,000 a month. As they look to scale up to a million dollar run rate, they are burning cash to do it, about 20 grand per month is burned right now as they look to continue to scale. Ramon, thank you for taking us to the top.

Ramon Barrios:

Yeah. Thank you Nathan.