Levanta: From Fiverr Side Gig to $3M ARR SaaS – with Ian Brodie [387]

This is a machine-generated transcript.

[00:00:00] Omer: Ian, welcome to the show.

[00:00:01] Ian: Thank you so much, Omer. Thanks for having me. My pleasure.

[00:00:04] Omer: Do you have a favorite quote, something that inspires or motivates you that you can share with us?

[00:00:08] Ian: Yeah. It's actually from Rand Fishkin from his book Lost in Founder. It is great ideas and products are often born from mediocre ones.

[00:00:17] The keys are time enough to iterate and evolve into something remarkable, humility enough to see what's wrong and admit a failure so you can move forward and survival. You know, a, a profitable services business can be a godsend here.

[00:00:31] Omer: Great quote, and I love that guy. He is just some of the things he says, I'm just like, why didn't I think of that?

[00:00:36] Ian: He's an amazing blogger too. I, I read all his stuff.

[00:00:39] Omer: Yeah. Great. So tell us about Levanta. What does the product do? Who's it for? What's the main problem you're helping to solve?

[00:00:46] Ian: Yeah, so Levanta is an Amazon affiliate marketing platform for Amazon sellers. Specifically, we enable Amazon sellers to connect with content creators and publishers.

[00:00:57] To drive new sales and traffic to their Amazon storefront. We handle link generation click and conversion tracking affiliate payments. So you can kind of just focus on partnering with affiliates. Great.

[00:01:09] Omer: And give us a sense of the size of the business. Where are you? In terms of revenue, customers and all that stuff.

[00:01:17] Ian: So we launched in March of 2023 and surpassed 230 K in MRR in December. So we're, we're been profitable all of Q4 and then we just recently raised around and we're headed into the kinda the growth phase now. So we currently have over 650 brands on the platform. Over 2,500 affiliates. We grew to 10 FTEs in January and have a couple more on the way.

[00:01:45] Omer: Okay, so this business, you launched this business less than a year ago, and last month you already hit a run rate of almost 3 million in ARR. Yes sir. Right now, people listening to this are gonna be going, oh god. It's one of those stories, right? So. What I think is really interesting about what you guys have done is, is not just the last year, but the story really begins Several years ago when you and your co-founders wanted to start a SaaS company and you started out with a services business, and for several years you tried to.

[00:02:30] Turn that services business into a SaaS company and failed at it. And then once you launched Levanta, all those struggles and failures actually turned out to be valuable. Lessons and experiences that helped you get to where you are today and and, and achieve what you've done in the last year or so. So I think that's really a great place for us to start the story. So what was the name of, of the agency or the services business and what did it do?

[00:02:58] Ian: Yeah, it's called Grovia originally Grovia Partners. It was a little play on words. We helped businesses grow via partners and it was a a tech enabled service that was all around affiliate recruitment.

[00:03:08] So we at a services team and also a little like tech tool that basically allowed us to go help e-commerce companies, SaaS companies go and recruit. Affiliates, agency partners, influencers, at scale, and kind of recruit them into their partner program.

[00:03:23] Omer: Great. So why don't we, we stop there. Before you started Grovia, why did you wanna start a SaaS company?

[00:03:31] Where did this idea come from in terms of how you got started? You know, and I think just, just to, to help kind of frame this for people, like, you know, I, I want to talk a little bit about how you built the services business, but it's not because, you know, just we want to talk about services business. I think there's just, just a ton of valuable lessons there when it comes to how that's helped you.

[00:03:52] I. You know, finally get to running a SaaS company. So, yeah, let's start at the beginning, like, where did the idea come from?

[00:03:58] Ian: Me and my co-founder, his name's Rob I'll be mentioning him a lot. He's my co-founder from Grovia, same co-founder in Lata. And we met in college and had always wanted to start a SaaS company.

[00:04:10] That was, that was our dream. I majored in entrepreneurship, took classes around SaaS. When I graduated, I went and worked for a software company. So it always been our, our, our dream to do this. And we actually, right when Covid kind of happened, you know, it was like March of 2020, we both quit our jobs and just said, Hey, we're gonna go start a company.

[00:04:30] We don't really quite know exactly what it is yet, but we'll figure it out as we go. Rob had the idea 'cause he was working for an affiliate tracking platform at the time called Tune. It's actually a Seattle company. And he had this idea, Hey, we could go and help people recruit affiliates. And he had this idea for a software product.

[00:04:49] I loved it. And so we quit and I started going immediately and talking to VCs, talking to Angels and say, Hey, we wanna build this software. We think it's a great idea. Here's the whole kind scope. And of course we got like laughed out of a couple rooms because we had no product. We were right outta college.

[00:05:06] We didn't have an engineer. So that was another thing is it was just we, we were two business guys that were trying to start a SaaS company. And so our, our solution was to start Grovia as. A services business. We sketched out like a scope of work that we'd use for every client, and it was all inspired by the software we eventually wanted to build.

[00:05:27] And we put listings out on Fiverr. So within a couple days of making that Fiverr listing, we had over like a hundred inquiries saying, Hey, yeah, we, we'd love to try out your service. So we knew we were onto something then.

[00:05:42] Omer: So tell, tell me more about Fiverr. I think that's a great way to validate an idea.

[00:05:47] I've never heard of it being used to validate basically a SaaS business. That's what you did. So what, what did you actually post and what was it like we're gonna help you with, with affiliates and we're gonna do it for like five bucks or something.

[00:05:58] Ian: And yeah, it was super cheap. I don't even actually remember what the exact price was, but it was like absurdly cheap.

[00:06:05] And what we offered was we broke it up into kind of three, pillars. Discovery, so we'd go and find affiliates for you. Recruitment, we would go and email them and then activation, we'd get them into your affiliate program and get them revenue active. So that was the service we eventually wanted to build, you know, the, the software that kind of allow you to do all those things in a more automated way.

[00:06:25] But yeah, we started it with just that service and we posted on Fiverr because we wanted to validate that people actually wanted this before going and building a website or you know, obviously building the product. Fiverr's like a great way to just kind of throw something that gets a lot of exposure and, and see if people wanted it.

[00:06:42] And we got so much that we could actually move off of Fiverr almost immediately. I think we only took maybe two or three clients off of Fiverr before we started using some other marketing strategies that helped us kind of get more clients after that.

[00:06:54] Omer: Yeah, I, I love that. I mean, I, I don't know why I've never thought about that before.

[00:06:58] And it makes me think there's gotta be so many other, you know, founders who are starting out and they're saying, you know, I don't know how to validate my idea or. You know, I don't even have a great idea. Well, you know, what can you do? What can you help people with? Like, package it up as a five service and see if you can get people to respond and, and actually go through the process of helping them.

[00:07:20] Right? And you can, you can learn a lot just from, from doing that. So I think that's great. Okay, so you get all these inquiries, right? But then what did you do? Did you actually start like, delivering on the service or that was just like, actually, you know, we, we, we, we just kind of wanted to, to test the the demand.

[00:07:34] Ian: Yeah, no, we, we definitely delivered the service. You know, with Fiverr, a downside with Fiverr is you get some, some companies who are definitely a little earlier maybe not, maybe don't have the great greatest products for affiliate marketing. So. I remember one of our very first clients actually sold dog food dewormer, and it, it turns out it's, it's quite hard to recruit content creators to go and promote deworming dog food.

[00:07:56] We tried our, our tried a hard to make that happen. But it was pretty tough. We had, we had a lot of clients like that. We realized, okay, man, like this, we, we've definitely established that there is demand in this SMB market for this, but maybe we can kind of break out of these really, really small customers and move a little bit more up market.

[00:08:14] Omer: Okay, so you, you validated the demand. You've got a little bit of a better idea of who your target customers are or who your target customers, you know, maybe shouldn't be. Where did you go from there?

[00:08:30] Ian: Yeah, from there. Well, the goal was always to go and, and build that, that software product. And so the, the goal was to kind of.

[00:08:39] Get some profit and start being profitable and then eventually kind of have enough profit to go and like hire an engineer. So that was the goal. And how we actually caught our first break was we started reaching out to affiliate tracking software companies. So we were an affiliate recruitment service.

[00:08:57] There was software companies out there that offered affiliate tracking software. Our idea was that these affiliate tracking platforms, you know, had the software but maybe didn't have the service offering to go and find affiliates and, and help their customers actually build the affiliate program that they were kind of selling to them.

[00:09:14] So it turns out we were right. We. Found a partnerships manager at a company called Refersion, and she liked the idea and immediately started referring us clients. So that's where we got our first big client. And then we got a few more from there. We said, okay, maybe we can scale this out. So then we contacted all the affiliate tracking platforms.

[00:09:35] Like Impact Partner Stack Awin and eventually kind of built out mutually beneficial partnerships with each of them. Where they would go and sell e-commerce companies or SaaS companies on affiliate tracking software. We would be the service provider helping them kind of go out and recruit affiliates.

[00:09:54] So we kept the strategy going and, and our kind of business took off pretty quickly after that.

[00:09:58] Omer: Okay, great. So that gets you clients, it gets you revenue. Presumably you, you mentioned you, you were dealing with like, you know, bigger companies and kind of more, more kind of serious players, which is great.

[00:10:12] Did you, were you able to raise enough money there to start funding the SaaS business then?

[00:10:19] Ian: Yeah, we were, so we ended up you know, growing to 26 employees about, and by this time we had hired a CTO and he started building out this software product that we had dreamed of. Interestingly enough, what we quickly learned was that software product that we had always imagined really actually didn't work that well as a self-service tool.

[00:10:43] People loved it as like a tech add-on to our service. So they wanted our team to be kind of using this tool and then they can kind of check in, see what our progress had been, what the pipeline of affiliates were. It's kinda like a CRM for partnerships, but they didn't actually want to be the ones going and like scraping for affiliates and tracking all of these and going and doing all the outreach.

[00:11:04] So it actually ended up being a more of a tool for our internal team than a self-service. Which was kind of a big takeaway from us from this first business, which was, man, if we actually had gone and raised a big VC round right off the bat to build this SaaS product, we hadn't actually really validated much at that point.

[00:11:23] We would've spent a ton of money and time building a self-service tool and then kind of had no revenue to show for it. But instead we started, you know, a little bit more scrappily. A proven model that we knew worked and then ended up with a, a tech product that actually really supported our internal services team.

[00:11:39] Omer: Okay, great. So you, still haven't got a SaaS business, but you, you keep doing the right things to grow the services business. Which is, which is, I, I guess it's good, but maybe not good because it's not the ultimate goal that, that the two of you wanted. So what did you do with that, that tool?

[00:11:59] Did you kind of go back to the drawing board and say, you know, we need to go and build a different product, or was the SaaS business still in sight? Or, or were you getting to the point where, which is like, maybe we were just destined to run this services company?

[00:12:13] Ian: Yeah. As we started kind of building out the, the SaaS tool.

[00:12:17] I think it occurred to us as we were building it that hey, we actually have an internal team that also is gonna benefit from this, so we should definitely build it in a way that our internal team and all of our customers who are benefiting from our service can also use this. And then we'll also have like a self-service portal as well for people who aren't using our service.

[00:12:36] And there just wasn't a lot of traction even after we launched it, we marketed it. It had been probably six, seven months of trying to like push this thing out as a self-service tool, and it just wasn't gaining a ton of traction. However, our service customers loved it. Our internal team loved it. And yeah, we, we started to realize, okay, I think Grovia is a tech enabled service company.

[00:12:59] It's not a SaaS business.

[00:13:01] Omer: And then how, how long were you running Grovia year for?

[00:13:04] Ian: It was exactly two years, so right around the 18th month mark, we started getting a lot of inquiries for acquisition. And it was something that was definitely interesting to us because we did have that dream of starting a SaaS company and we were starting to realize, okay, this is definitely a services company.

[00:13:22] And a lot of the companies that were reaching out to buy us were big affiliate services company that kinda liked our model, liked the recruitment approach, liked the, the tech we had built. So we started getting offers. It was, it was a, a difficult challenge for us to kind of identify, okay, is this the right time to sell or not?

[00:13:42] Omer: Right? Yeah. How, how, how, how big had the business grown by then?

[00:13:45] Ian: We were the largest we got was 26 employees in right around 3 million of a RR. So that, that was where we were when we sold.

[00:13:53] Omer: Oh, that's not bad for, for what, two years of building that business?

[00:13:59] Ian: Yeah. Yeah. It grew fast. We never really got super profitable though.

[00:14:03] So there was, it was basically break even month over month. We were investing a lot into the tech. So. There was, there was probably opportunity to be more profitable than we were, but we were really excited about the tech and very bullish in the tech. So we were pouring a lot of money back into that.

[00:14:18] Omer: And, and was, did this growth all come through those, those partnerships that you did with those affiliate platforms?

[00:14:25] Ian: Yeah, it was, it was almost entirely driven by partnerships. We weren't doing any paid marketing, we weren't sponsoring events. It was all from our partnerships program, referrals from these tracking platform. So we also had some like affiliate thought leaders that liked what we were about, liked our methodology, liked the tech and would refer us clients as well.

[00:14:46] Omer: Okay. So you eventually decide that you're gonna sell this services business, sell Grovia. When did that happen? That like the, the late later part of 2022?

[00:15:00] Ian: It was actually, it was January of 2022 when we had kind of made the decision. Okay. We have these two, three buyers, we're gonna, we're gonna make one of 'em happen. And so we started negotiating and we actually ended up getting a, a deal that excited us. You know, it was, it was like a mid seven figure deal that made sense for the founders.

[00:15:22] It made sense for the employees. And we kind of came to grips with the idea like, okay, we. Built a, a good business here. That's exciting. People in the industry, you know, our employees are happy, but we, the founders want to go build SaaS and this isn't that. So maybe, maybe it makes sense. And so we got, we got this deal and it, it was.

[00:15:43] It was a good outcome for us. So we, we, we started kind of pursuing it and making it habit.

[00:15:47] Omer: Okay. And had you raised any money for Grovia or was this as, as you know, bootstrapped.

[00:15:52] Ian: It was bootstrapped, yeah, it was, it was almost entirely bootstrapped right at the beginning. I had a, a family friend who gave us, I think 25K.

[00:16:00] Omer: So not, not exactly, you know, not a hugely profitable business, but you, you got the. You know, you're able to sell the company and, and did you go and you, you worked with the company that acquired you, you, you, you guys went and worked there for a while, right?

[00:16:15] Ian: There was no golden handcuffs in the deal. So that was kind of obviously an important factor for us.

[00:16:19] And we obviously really wanted to make sure that integration went well. So we stayed, it was eight months, which was kind of more than enough time to integrate the business into the, the acquirer. And then we started to kind of look at what our, our next thing would be.

[00:16:33] Omer: So you start looking at what your next thing is gonna be. You guys have had a good outcome with Grovia, but you set out to build a SaaS business. Been trying to do that without much success for, for a couple of years. What, what was the next idea?

[00:16:52] Ian: It was an idea that formed while we were at Grovia. One of the customers we were servicing was a big Amazon aggregator, so they bought up a bunch of Amazon brands and owned a ton of them.

[00:17:05] And what they had figured out was Amazon has had launched this new attribution, API that allowed them to, for the first time, track the external marketing efforts and see when they actually resulted in conversions and clicks. They took that attribution API and started going and building negotiating affiliate partnerships.

[00:17:27] And for the longest time, Amazon sellers, Amazon aggregators have not been able to go and like build affiliate relationships and like track attribution and make affiliate payments that didn't exist. We saw them doing this while we were at Grovia and we actually helped them go and recruit affiliates and it kind of clicked to us like, wow, what if we built.

[00:17:48] An affiliate platform around this attribution, API, that kind of matched all the, the bells and whistles you'd find with the D2C affiliate platform. And we brought it into kind of the Amazon world. So that was the, that was kinda the genesis of the idea.

[00:18:02] Omer: Okay, great. So how did you validate the idea this time around?

[00:18:05] Because you didn't do it the first time until realizing a couple of years later that God, we would've built, you know, we built the product and it's the wrong product. It's a good thing. We didn't do that from day one, so I. Did you validate the idea this time around?

[00:18:20] Ian: Yeah, we were we put a lot of effort this time around into validating it.

[00:18:24] We went and it was mostly Rob, my co-founder who he went and was on the phone all day for months, just calling up Amazon sellers, calling up, calling up Amazon aggregators, affiliates who were previously promoting Amazon stuff. Like, Hey, does this sound interesting? Like if we could build this platform, if we could build the impact.com of the Amazon world, would you be interested in that? And we were just getting yeses across the board and we had already worked. In this space before at Grovia supporting that company who was kind of trying to do this manually. So we kind of had validated it there and then between these phone calls over the course of a couple months with everyone kind of giving us the thumbs up, we're like, okay.

[00:19:06] I think, I think there's something here.

[00:19:07] Omer: Well, just for people who don't aren't familiar, and I'm not even sure I'm clear, is like, just, just explain what an Amazon aggregator is.

[00:19:14] Ian: Sure. Yeah. They are usually very well funded. Usually buy like VC or private equity companies who just buy up Amazon brands and kind of aggregate them together.

[00:19:25] And their value prop is we can run Amazon businesses more efficiently kind of at scale and we can buy tools and offer more efficiencies when we're kind of doing this at scale. So like the, the most popular example of this is like thio and. They just went bankrupt, so Wow. It's, yeah, actually like a kind of interesting time for Amazon aggregators.

[00:19:48] A lot of them raised a ton of money in the kind of the Covid era and a lot of it was debt. And so now a lot of 'em are trying to kind of restructure. So that was the genesis of our business, was kind of working with these Amazon aggregators and we still work with a ton of 'em and they're actually.

[00:20:03] Great customers, but we're not just built for Amazon aggregators. We also have, you know, direct relationships with individual Amazon sellers.

[00:20:10] Omer: Okay. So this time around, so you spent a few months validating the idea, having all of these conversations you also have a bit more money in your bank accounts.

[00:20:22] How, how did you go about trying to build the product? Because. At this point it was still the two of you, right? Two business guys?

[00:20:28] Ian: Yeah. Well, this time around we actually brought on our CTO that we had hired kind of midway through Grovia as a co-founder. We had a technical co-founder right off the bat that made a huge difference than starting a SaaS company.

[00:20:40] I highly recommend having a technical co-founder when you're starting a SaaS company. The thing that was really different this time around is we had that additional credibility and confidence. So we right off the bat. Went and raised kind of a seed fund, pre-seed funding round from Seven Angels, and this was pre-product.

[00:21:01] This, I basically wrote up a white paper and sent it out to 15 angels that I had met, or a new, and seven of 'em said yes. We raised the round in two weeks, and that kind of gave us enough. It was 430k. It gave us enough fuel to hire. Three people, a CSM, a salesperson, and another dev, and then give our the three co-founders a, a kind of a, a basic salary.

[00:21:29] Omer: The first time you, you told me about going out to raise money, you said some of those meetings you got laughed out of, of the room because you didn't have a product, you didn't have, you know, the engineering, you know, talent or co-founder. So this time round. You have, you know, a technical co-founder, but you still don't have a product.

[00:21:51] You still don't have any customers. Why were you, or why do you think you were able to raise. So quickly.

[00:22:01] Ian: I think a, a, a big part of it was just kind of having that recent acquisition right off, like right under my belt just from a few months prior. So that was definitely an important part of it. Other part is that, you know, I lived and breathed this world for, for two years.

[00:22:15] You know, I wasn't going and starting a company in a completely different space. It was. Right in the exact space that, that Grovia was in. So I had a little bit more just trust from the people I was talking to. And a lot of the people who invested were actually industry folks. So they had maybe heard about Grovia or met Rob or myself over the last few years.

[00:22:35] So it was definitely a lot easier to get them to buy in.

[00:22:38] Omer: Okay, so you've, you've raised you know, a seed round. You've got, you know, you start to put a team together. How long did it take to build that, that first version of the product and like what, what did it do? I, I'm sure it was very different to, you know, what you have right now.

[00:22:58] Although having said that, it's only been a year or so, so maybe it isn't.

[00:23:02] Ian: It was November of 2022 when we incorporated the business. We raised the round in December of 2022, and during this time, while I was raising the round, we, the, the CTO was starting to build the product. We had a beta ready in February of 2023, and then the live production version was ready in March.

[00:23:23] That's when we kind of publicly launched the business. Announced it on LinkedIn all that jazz. And right off the bat we knew we wanted to grow this business via partnerships similar to how we had kind of grown Grovia.

[00:23:38] Omer: Okay. And, and so let's talk about those first 10 customers. You got the product out there. How did you find those, those initial customers?

[00:23:45] Ian: Yeah, so the way, so we were targeting Amazon sellers. That was our, our target market on. You know, kinda the seller set of things. Obviously we also need to go and get affiliates 'cause we're building an affiliate platform. Affiliate marketplace kind of have, have to build both sides.

[00:24:02] So rather than going and individually selling each Amazon seller going and individually selling EV each affiliate. We actually went and targeted affiliate agencies. Actually quite similar to, so our, our target kind of partner persona was actually affiliate agencies. Like, so we're kind of building a product in a way.

[00:24:23] For our previous selves at our last company, we knew from our time at Grovia that affiliate agencies would absolutely go crazy for an affiliate tracking platform that would enable them to build affiliate programs on Amazon. You know, historically affiliate agencies have only been able to manage affiliate programs for D2C merchants but by creating a platform that unlocked Amazon affiliate marketing.

[00:24:48]We are essentially enabling affiliate agencies to expand their target market, unlock a whole new service offering for kinda the Amazon side of things.

[00:24:56] Omer: So you, you've, you're basically selling to you Grovia, right? That's kind of what I heard. How, how easy or hard was it to make, make that that sale?

[00:25:07] Ian: It was pretty straightforward because we kind of spoke.

[00:25:11] That language already. We, we knew this target persona so well and we weren't actually, you know, selling them you know, asking them for money. We were really asking them, Hey, do you want to use this for your clients? 'cause the end client is the, the person who's actually gonna be paying us. The affiliate agency isn't our customer.

[00:25:28] They're the partner. And so they. Refer us clients, and then the affiliate agency actually manages the servicing on that account. And then they also go and recruit affiliates. So what affiliate agencies are really good at is, you know, obviously running an affiliate program. A big part of that is recruiting affiliates, managing affiliates and all that.

[00:25:48] So by. Having affiliate agencies be our first kind of target partner and closing that partnership, they're gonna bring us the client and they're gonna bring us the affiliates. And so that allowed us to scale super, super fast.

[00:26:03] Omer: Did you, did you have any cha, I mean, it sounds too easy, you know, what was the process in terms of, okay, they don't have to pay anything, great, but they still work involved, right?

[00:26:10] I mean, they've still gotta, I guess, at least understand the product, be comfortable with it. They've got to, before they start recommending it to. To affiliates. Affiliates have gotta kind of understand the pro. It just feels like there's, there's a lot of moving parts here to get adoption yet, you know, we, when you, you, I think, what was the number you told me it was like, it's like two and a half thousand affiliates in a very short space of time.

[00:26:38] Ian: 2,500 affiliates is correct. Yeah. But. Yeah, it, it did strangely, it kind of all clicked together. I think a, a big reason why it was able to work that way is these affiliate agencies were already operating their services businesses for the D2C space. And we built LTA in a way to match the exact processes they were already going and, and using on the D2C side.

[00:27:04] So the D2C affiliate marketing platforms had kind of a set. Number of features. And when we built Levanto, we made sure to kind of model our product off of these features and these processes that were already going in the D2C. So the idea was that they could quickly kind of jump in it, look at the ui, it makes perfect sense to them and do the exact same process they're already doing on the D2C side.

[00:27:28] But now just doing it for Amazon sellers it's the same affiliates. So they don't have to like go and recruit a different type of affiliate. It's the exact same affiliates that are promoting D2C promote Amazon. And a lot of the D2C sellers also have an Amazon channel, so it's sometimes even the same merchant.

[00:27:45] So you're not even necessarily having to go and close a new type of customer. Your existing customers already have an Amazon channel. So it's the same process, it's the same affiliates, it's the same merchants, it's just a new channel. But. Yeah, there's definitely aspects of the Amazon affiliate world that are different from the D2C affiliate world.

[00:28:04] So there's certainly some, some change management and a big growth channel for us in, in that sense is content.

[00:28:11] Omer: So one question about the product that you built. It, it sounds like making the sale was relatively easy. Because you knew the type, you knew exactly the type of product that these, you know, these, these affiliates, these agencies wanted, you knew you'd, you spent two years building Grovia and I guess had a bunch of insights from that.

[00:28:39] Like, do you, maybe this is a loaded question, but do you think. If you hadn't spent those two odd years working on Grovia, you would have been still able to build that product?

[00:28:53] Ian: Absolutely not. I've actually been asked that question before. And my answer's kind of always been the same. It's, there's, there's no way we would've been able to, to build Levanta without having spent two years at, at Grovia learning the space, learning the agency ecosystem, learning the affiliate ecosystem, learning how to recruit affiliates, learning how to close deals, all that there, there's just no way we would've even been able to identify this problem in the space if we hadn't spent kind of two years neck deep offering a service around this.

[00:29:20] So, yeah, no way.

[00:29:22] Omer: Okay, great. So we talked about recruiting the affiliates. But then you've got the other side of this, which is sellers. So how did you go about finding those people?

[00:29:34] Ian: Yeah. When we first started in March, made that big public launch, the very first customers we went and closed were those big aggregators.

[00:29:44] The idea being that we could close one aggregator and they would have a hundred brands, and so we can just kind of load the platform up with, with. Amazon products without having to go and close a bunch individually. So I think like the first 10 people who adopted our product were some of these Amazon aggregators.

[00:30:02] And then from there we would start to go and, and sell the individual sellers. Often through the affiliate agency partnerships we had, they would kind of bring 'em over to us. So that was a big part of it. And then I think the other big part of it was the educational content, making people aware of this new channel that we had built.

[00:30:22] Amazon sellers for the most part, aren't aware that they can now do affiliate marketing. And same as kind of on the affiliate side. A lot of affiliates don't know that they can do affiliate marketing for Amazon.

[00:30:35] Omer: So, so before you launch Levanta, there was like no way for for them to do affiliate marketing?

[00:30:43] Ian: There was no way for them to directly partner with Amazon Sellers.

[00:30:47] Amazon Associates is a centralized affiliate program run by Amazon, and it's the largest and longest-running affiliate program ever. It was launched in 1996, and affiliates have been promoting Amazon products through that channel for a long time, but Amazon centrally manages that. They kinda have set commission rates for products, and it's not like an Amazon seller who wants to go work with, let's say wirecutter, they can't just go and like build an affiliate relationship directly with Wirecutter to promote their specific products. So prior to lta, I mentioned earlier, there was a couple people who were trying to make this work in kind of like a service offering and were kind of doing this manually.

[00:31:26] I. But there wasn't an affiliate platform that allowed people to kind of do this at scale, recruit tons of affiliates, or as an affiliate, go and work with tons of sellers.

[00:31:35] Omer: Okay. Makes sense. So yeah, I mean, you, you, I, I guess it's almost like a new category, right? And so I, affiliate sellers don't even know they can do this.

[00:31:45] So no one is out there looking for this probably, or, or most people are, are not bothering. So you said you started creating content, but I guess you have to do it. At, at some scale to be able to reach all the right people. So how are you creating the content? And again, we're talking about a very short window.

[00:32:06] We're talking about, you know, 10, 11 months. Like how, how did you create enough content? I. It w you know, within a, a relatively short space of time. And then how did you get eyeballs to it?

[00:32:19] Ian: It feels almost like I'm like a broken record, but it is. It was through our agency partners, we, we were actually able to scale out this content strategy via our agency partners.

[00:32:28] And a lot of our case studies, eBooks and guides are actually. Co-branded and co-authored by our affiliate agencies and these agencies, you know, if you say, Hey, we want to do a piece of content with you, they're really quick to raise their hand and say, I'd love to participate. I'll bring in my, my client.

[00:32:48] I. We'll write a case study. We can help you distribute it. We can help market the content. We can help design the content. And so by kind of starting these like co-marketing efforts with multiple affiliate agencies, multiple partners at once, we can create a lot of content at scale and then. They go and distribute it to their own networks.

[00:33:04] And it definitely has a, a, a bit of a snowball effect.

[00:33:07] Omer: And, and was it mostly case studies that, that you were creating?

[00:33:11] Ian: Not just case studies? We've created some case studies via that method, but some of 'em were, were eBooks and we did that even like a, a white paper. And we repurposed the content quite a bit.

[00:33:21] So we'll kind of do our initial launch. Let's, for example, we had an ebook we did recently with a agency called Envision Horizons. They actually wrote a lot of the content. We designed the ebook. We pushed it out and at launched it was great, but now we are actually running LinkedIn ads with the content and driving kind of more traffic to, to this ebook and getting people aware of what Amazon affiliate marketing is.

[00:33:44] So, yeah, it's, it's part of the whole category creation awareness campaign.

[00:33:48] Omer: Okay. One thing I need, I wanna understand here, like you go to these agency partners, effectively what you're saying is can you create some content? We'll help with the content, but you know, can you create content? Can you distribute the content to your customers so we can get customers?

[00:34:10] Right? There's a lot of upside for you. What was the benefit for them to do all that work?

[00:34:15] Ian: I. Yeah. Well if you think about a lot of these affiliate agencies previously were just kind of relegated to the D2C channel. A lot of their own customers don't know that they can now go do Amazon affiliate marketing as well.

[00:34:28] And a lot of these agencies have opened up new SKUs, new service offerings around Amazon affiliate marketing. So. What's in it for them is they also want to go drive awareness about the fact that, hey, we opened up a new service offering for Amazon affiliate marketing. If you have an Amazon channel, let's start running affiliate traffic to it as in addition to your D2C channel.

[00:34:50] Omer: Got it. Okay. Okay. So there was a, there was there, there was some clear, you know, what's in it for me, for them as well? Like to, yes. To get involved in doing this. Yeah. Okay. Got it. Putting this story into context, I think we, we did that at the start here. The. You've got to almost 3 million a RR with SaaS business in, in less than a year.

[00:35:11] But the reality is it's probably taken three plus years of what you went through with Grovia and, and you know, building that, you know, that agency business to be able to get you to this point. Other than what we've talked about, when you look back, what have been, you know, some of the hardest parts of, of building.

[00:35:33] This business. 'cause we don't want people to go away here and thinking it was all too easy. And I think hopefully we've done a, you know, a good job to, to kind of explain some of the struggles along the way. But what else has been kind of difficult for you as a founder in terms of building this business?

[00:35:51] Ian: Well, it's, it's always been a challenge to identify the right level of funding and the right source of funding, both for, for Grovia and Levanto. It was, it was hard for Grovia because. I had really no idea what I was doing. And, and trying to figure out like, okay, is is vc, right? Like, is this a VC worthy business or not?

[00:36:09] Lavante had some experience into my belt, but there was still some, some challenges associated with, with finding that right source of funding. 'cause you have, I. The die hard bootstrappers who tell you, you know, you gotta pull yourself up. Don't take VC funding don't dilute yourself. And then you have like, on the opposite, which you have these like high growth unicorn, big funding rounds, it's very sexy, the big launch parties.

[00:36:34] And that's very attractive. And there's, you know, there's a bit of a VC scene in, in Seattle, and so there's some pressure to do that. So it's hard to, it's hard to know how much funding you need, and it's also hard to know like where you're gonna get that funding from.

[00:36:47] Omer: Right. And, and so what, what was the takeaway? What was the big lesson for you from what you've gone through?

[00:36:55] Ian: Well, for, for Grovia, we learned really quickly that it was just, we weren't gonna get Visa. It's VC funding. It was a services business. You know, we ended up getting some revenue based financing and it was kind of like basically a loan. On the, the amounts of revenues we had coming in recurring LTA was a bit different.

[00:37:12] You know, we had some validation coming off of the sale of Grovia. We had Angel interest right off the bat, and I mentioned we closed that small round of, you know, 430 k. Pre-product. But then once we had traction, and I think this is kind of where things get a little bit more interesting, once we had traction, we had some profitability things were looking very good.

[00:37:29] We were at a bit of a crossroads. You know, we had a ton of VC interest, but many of them wanted us to raise boatloads of cash sign our lives away, kind of try and go after that unicorn exit. And the US founders were like, I don't know if this is a multi-billion dollar company. And then we looked at just maybe.

[00:37:49] Going off of the profit we had going and, and growing more steadily. But then we looked at some of the competition that was starting to kind of build and we're like, huh, we have this market leading position right now where we have this first mover advantage. It would kind of be a shame to not put a little bit more fuel on and, and, and grow.

[00:38:08] So we all met up and we decided we wanted to, to raise around, but we didn't want to raise too much money that we were kind of caught up in this. World where we're constantly trying to meet our skyhigh valuation and then kind of then becoming dependent on round after round of, of funding. So we kind of had this idea to find a middle ground that left us a lot of flexibility on exit timeline.

[00:38:31] So not too skyhigh of a valuation. So a reasonable valuation that allowed us to, to put, put a multiple on that valuation quickly. So if we did want to exit in, you know, two to five years, we could still do that, but it's hard to find. A VC who's interested in a 10 million valuation, which is what we did. A lot of 'em wanted a much higher valuation, said, I need to return my fund.

[00:38:56] I can't return my fund off of this investment, so I'm not interested in this. We had probably 30 conversations like that, and finally we found this kind of more boutique. Firm that said, okay, we actually only need three to five x return. We don't need a, we don't need to return our whole fund. We're comfortable with a smaller valuation, a smaller amount invested.

[00:39:21] And we went with that and it was right for us. So I think that's, that was a lesson learned here is, you know, funding is, is kind of a, a fickle art. You know, every business is different, every founder is different, every funding source is different. So you gotta kind of figure out what's right for your business and right for the direction you want to take things and don't want to get swept up into.

[00:39:43] The sexy VC round or feeling really hardy because you pulled yourself up from your bootstraps and accepted no outside funding and got zero dilution. So it's a balance.

[00:39:51] Omer: Yeah. Yeah. That's a good, good, good, good takeaway. Sounds like you guys find a happy medium. I think if you're having a lot of those conversations and everybody's saying the same thing, I, I don't know if you would tempted just to say maybe we should have a.

[00:40:04] Higher valuation, and maybe that's the only way to do this, but you didn't, so kudos to you stuck to your guns.

[00:40:13] Ian: We, we did, we tried. Yeah. We, we definitely tried hard to, to get to a place where we were happy with.

[00:40:18] Omer: Great. All right. We should wrap up. Let's get onto the lightning round. I've got seven quick-fire questions for you.

[00:40:24] Just try to answer them as quickly as you can. What's one of the best pieces of business advice you've received?

[00:40:29] Ian: Validate, market demand before going all in. Good lesson.

[00:40:34] Omer: What book would you recommend to our audience and why?

[00:40:38] Ian: I really like Rand Fishkins book Lost in Founder. It kind of talks a lot about a lot of the stuff I was just talking about, validating market demand and also kind of getting the right source of funding.

[00:40:47] So highly recommend it.

[00:40:48] Omer: What's one attribute or characteristic in your mind of a successful founder?

[00:40:52] Ian: I. Probably emotional intelligence.

[00:40:56] Omer: What's your favorite personal productivity tool or habit?

[00:40:59] Ian: I love linear. Our whole company runs on linear. We started as a dev project management tool. We just took it to the whole company.

[00:41:07] It's awesome. Highly recommend it.

[00:41:09] Omer: What's a new or crazy business idea you'd love to pursue if you had the time?

[00:41:12] Ian: It's cliche, but we're definitely interested by some of the chat GPT stuff going on. How do we blend affiliate marketing with. With the GPT store, how do we monetize GPT product suggestions? So we're, we've been looking into that.

[00:41:26] Omer: What's an interesting or fun fact about you that most people don't know?.

[00:41:29] Ian: I'm a competitive fencer in my free time. Wow. I sword fight.

[00:41:33] Omer: Wow. And finally, what's one of your most important passions outside of your work?

[00:41:37] Ian: I travel and I try food in those new regions, in new countries. I think that's. It's probably my favorite thing to do is travel somewhere new and try the food.

[00:41:47] Omer: Sounds like a good passion. So Ian, thank you. Thank you for joining me. It's been a pleasure. Definitely a fascinating story. I think that, congratulations on the, the success that you've had over the last year or so. You know, wish you and the team the best for, for the future. If people want to check out lta, they can go to lavana.io and if folks wanna get in touch with you, what's the best way for them to do that?

[00:42:14] Ian: Yeah, Ian at levanta.io is, is a great place. So you can also follow me and connect with me on LinkedIn or just our contact us page on, on levanta.io. It's all great.

[00:42:24] Omer: Awesome. Thank you my friend. Been a pleasure and good luck with 2024 and yeah, I'll definitely be checking in to see how you're doing.

[00:42:34] Ian: Yeah, no, it'd be great to stay in touch. Thank you so much for having me and hopefully it's been helpful. Totally.

[00:42:38] Omer: My pleasure. Cheers.