Dear friends, colleagues & partners!
First things first – Merry Christmas and Happy New Year!
A friend suggested I start writing regular Splento updates to keep all current and prospective stakeholders in the know and I thought – why not? What a brilliant idea!
I’m not yet sure how often these “regular” updates will be, but let’s aim for once a quarter.
Five major achievements in 2016:
1) Product: in Q4 we fully automated our system.
2) Revenue: we became operationally profitable in September 2016.
3) Partnerships: we ran successful trials with Canon and Eventbrite.
4) Clients: Yes, we did photograph the Queen and the Duke of York!
5) Investment: we raised debt, instead of going for VC funding.
Five major priorities for 2017:
1) Relaunch client iPhone and Android apps (photographer app is in the AppStore and is fully functional)
2) Expand geographically.
3) Get more press coverage.
4) Get to 50 clients a day (circa £5mln pa turnover).
5) Agree 3 major partnership deals.
The Devil is in the detail:
Yes, at long last we have fully automated our system. Not that we are planning to, but if we wanted to – we could now sit back, relax and watch new orders come in, relevant photographers pick them up, then upload raw files onto our system once they have finished, retouchers then do their magic and photos are sent to happy clients shortly after. No interference is required from the head office whatsoever. How cool, huh? We are now ready to process 1,000 clients a day if need be.
Being profitable is very unusual for a startup (that’s probably why VCs don’t like us), so after a quarter of being in black, we decided that it’s time to double down on our bet and put a lot more money into marketing. You will be seeing our ads on London Tube at the end of January and we’ll continue our “remarketing” onslaught, so apologies for all the Splento banner ads you are going to see in the coming years 🙂
Partnerships take time, partnerships take effort, but once done – they are an invaluable source of revenues.
Just an example – over 2 million events are organised through Eventbrite each year. Even if we supply our photographers to just 10% of these events, with our average ticket of £241 that would equate to circa £50mln of revenue and with our average gross margin of 30% we could afford to pay Eventbrite 10%, thus making them £5mln in affiliate revenue just from a few lines of code.
And yes – we are the only company in the world that has the technology and capacity in place to do that.
And that’s just the beginning, but we all know it’s a marathon (which I love and excel at), not a sprint.
The list of famous clients keeps growing, but most importantly as of October/November 2016 I no longer know all of our clients. From the very beginning I wanted to speak to every single client to make sure that we build product that people need, not what we think is great. Now with our full automation in place and rapidly growing number of clients it has simply become impractical for me to do that. I still spend a lot of time on Customer Support and Client Management, but we are in a lucky position that we can now concentrate on more strategic things.
Professional photography is a $50bln industry worldwide and 80% of it is controlled by freelancers (!!!). Not even small companies/studios. Freelancers!!! Several startups are doing something similar to what we do, but no one is offering a full end-to-end solution: from booking a photographer > payment processing > client management > photographer tracking > photo retouching > photo delivery > storage > post sales customer care. Which means no other company can scale! So for the time-being we are the only ones capable of grabbing the lion’s share of the market.
After two years of simultaneous product building, marketing and fine-tuning the business model – we have become 100% certain that it’s a winner. So we thought – why give an equity stake to VCs, when you can get debt funding instead?
The plan is to accelerate growth and get another round of debt funding towards the end of 2017 for international expansion. May be FundingCircle?
6) One last thing:
Oh, yes, almost forgot. We now also have rocket-ship-like dashboard which allows us to track everything what’s going on with a few clicks.
Here are some screenshots that you may find interesting.
a) Our average transaction is at £241 with a gross profit margin of 32.24% and client lifetime value of £521.76.
b) Some may think that all we do is photograph tourists for £98 a pop, but in fact 90% of the work we do are events.
c) That’s my favourite screenshot – who would have thought that most events happen on Mondays and Wednesdays?
HOW CAN YOU HELP?
1) We are seeking introductions to friendly journalists and bloggers. If you know anyone who loves writing about startups that are doing cool things and changing the world – let me know.
FORBES magazine gave us a lovely gift for Christmas: http://www.forbes.com/sites/montymunford/2016/12/23/londons-greenwich-is-not-only-the-centre-of-time-but-also-interesting-tech-startups but to take off properly we definitely need a lot more press coverage.
2) We are seeking introductions to large venue operators and brands. We have a solution that helps brands to get a much louder bang for their sponsorship buck. Help us help them.
3) If you know any rockstar sales people – please let us know. We are hiring!
Once again – have an amazing party tomorrow and see you in 2017.
Roman & Team Splento