Raising Funding on AngelList: Contactually CEO Zvi Band (Part 6)

Sramana Mitra: Let me get a couple of specifics there. What was the price point that you settled on?

Zvi Band: We’ve continually changed our prices. When we first launched, we charged $10 a month. By the beginning of 2014, we charged $20 and $40 a month.

Sramana Mitra: What does that mean?

Zvi Band: We had two different pricing plans. What we’ve learned is that customers were not just willing to pay one price. There were customers who were a little more budget-sensitive who didn’t care about all the functionalities we had, and who were willing to pay a lesser price for lesser functionality. That was our $20 a month price point.

Then we had a price point for people who were wiling to pay us more, and they were willing to pay for some of our power functionality. We actually started off >>>

Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 6)

Sramana Mitra: The first hundred that you closed, were you able to close them on the phone?

Ryan Caldwell: Yes. We had to visit some people but, we were able to close most of them over the phone.

Sramana Mitra: Teleweb sales, yes. Of the people that you closed in that first wave of going after the smaller financial institutions, how did those accounts grow from those couple of thousand dollar accounts? Did they grow to become larger accounts?

Ryan Caldwell: A lot of them were buying the first product. Not a huge percentage of them grew into larger contracts. The most significant of those grew rapidly through “land and expand”. Some deals that were $20,000 to $100,000 a year would grow to $2 million a year account. >>>

Raising Funding on AngelList: Contactually CEO Zvi Band (Part 5)

Sramana Mitra: When you went to 500 Startups to raise money, what did you have in place? Of all these things that we talked about, how much of this is in place?

Zvi Band: We had a prototype and we had around 100 active users. 500 Startups saw that there is a big market here. We had the key aspects of the founding team. Then they saw that we’ve obviously been able to build something that, while it’s a prototype, was on to something. That was the origin of why 500 Startups invested in us.

Sramana Mitra: These 100 users were paying?

Zvi Band: They weren’t paying users. They had demonstrated a willingness to pay. >>>

Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 5)

Sramana Mitra: What was the financial engineering behind the acquisition?

Ryan Caldwell: We acquired their company for mostly stock in MX.

Sramana Mitra: You said you and a few others invested in the company and got things going. At subsequent financings, what were some of the milestones that you managed to knock off?

Ryan Caldwell: The big thing for us was just scaling the number of financial institutions that were signing onto the platform. For year one and year two, we rapidly scaled past 100 and then 200. We started with the smallest financial institutions first. In fact, we have this well-known policy that I was strict on >>>

Raising Funding on AngelList: Contactually CEO Zvi Band (Part 3)

Sramana Mitra: Artificial intelligence is something I know a lot about. Help me understand algorithmically or heuristically what the software is doing. How do you decide on what you are recommending a sales person to do?

Zvi Band: We have an exact picture of who you know, when was the last time you spoke to them, and all the context around that. Then you train our system. You say, “Over here are my hot leads. Over here are my past clients. These are my investors.” You can apply certain ruleset on top of that. You can say, “In general, I want to talk to all my sales leads once a week.” We make it very easy. We built game mechanics so you can easily categorize people, and we can do that automatically for you.

Then we can say, “We know that Sramana wants to stay in touch with her sales leads once a week, there’s a sales lead over here that she hasn’t actually talked to >>>

Raising Funding on AngelList: Contactually CEO Zvi Band (Part 4)

Sramana Mitra: Talk to me a bit about customers before October 2011 and the 500 Startups funding. It sounds like you managed to get some customers to resonate with your idea. Who were those first customers? How did you get to them and what specifically did they tell you about what they wanted to see in your general idea?

Zvi Band: Great question. A customer is someone who pays you money. We didn’t have any customers, but we did have people who said they would pay for it. We didn’t build any credit card systems but had a pricing page. People could actually see how much it cost. That helped us. They didn’t like what we built and that was okay, but they did like the idea that we were pursuing. They were able to come to us with their own pain points. For example, let’s say, we have a real estate agent using the product. >>>

Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 4)

Sramana Mitra: What about customer validation? How did you get this off the ground in terms of the early customers and customer input early on?

Ryan Caldwell: We had to take really good care of the end user, which is our largest concern. If we don’t take good care of the customer, we can’t take good care of the bank or the software providers. We had to make sure that we had solutions that the end users resonated with. That was one of our first concerns. We also had to have software that would help deliver value back to the financial institution to help them better serve the end user.

If the credit union or bank can better serve the end user, then they can not only protect that end user but also have a stronger relationship, which eventually will >>>

Building a Fast Growing FinTech Company from Utah: MX CEO Ryan Caldwell (Part 3)

Sramana Mitra: What was the concept of MX?

Ryan Caldwell: MX is addressing one of the core issues for mankind, which is people don’t have visibility into their finances. Finance is, in fact, a critical part of life for people. So much of the intangibles that we care about whether it’s family or health are directly correlated to financial flexibility and emergency funds that may or may not be available and to certain amounts of financial freedom.

If an individual throughout their life doesn’t have a solid grip or understanding of their finances, it can not only affect them in their early stages of their life, but the later stages can be truly terrifying as they enter into old age. If individuals didn’t have control of tier finances and didn’t have the ability to reflect on >>>