How a 21-year-old CEO landed a $3.5 million seed round

  • Profitboss is a startup offering a free online ordering system for restaurants.
  • The company recently pulled in $3.5 million in seed funding in a round led by Redpoint Ventures and joined by Kimbal Musk, Figma CEO Dylan Field, AngelList cofounder Naval Ravikant, The Chainsmokers, Raise founder George Bousis, Tinder founder Sean Rad, and others.
  • Profitboss tracks user data in order to create customized ads designed to bring customers back to the restaurants it services.
  • The service is free for restaurant owners. It charges restaurant customers a $1.50 fee instead of taking a cut of financial transactions like other third-party delivery companies.
  • CEO Adam Guild, 21, started the business when he was 18 years old after creating its core software to help his mother’s struggling dog grooming business.
  • “Everyone in this life faces different sorts of challenges,” Redpoint partner Alex Bard told Business Insider, “and some people succumb to those challenges. And some people really thrive out of facing that adversity.” He added that Guild is one of those people that “really thrived.”
  • Visit Business Insider’s homepage for more stories.

Profitboss CEO Adama Guild is young, but that’s not a demerit. In fact, the 21-year-old’s boundless energy is one reason investors decided to pour millions into his retail tech startup.

His company Profitboss, which he founded at 18, recently scored a $3.5 million seed round led by Redpoint Ventures and joined by Kimbal Musk, Figma CEO Dylan Field, AngelList cofounder Naval Ravikant, DoNotPay founder Joshua Browder, Coder cofounder John Andrew Entwistle, The Chainsmokers, Raise founder George Bousis, and Tinder founder Sean Rad.

Guild describes his platform as “kind of like Shopify meets Salesforce, but specifically for restaurants.” The company provides online software for restaurants to take orders from customers, allowing them to build customer profiles. They can later send those customers regular, targeted advertisements, known as  “drip campaigns.” 

“We basically feed them personalized drip campaigns that are relevant specifically to them talking about the restaurant’s most popular dishes, about dishes on their menu that they might like based on what they’ve ordered in the past,” Guild said.

That drives customers to “order more frequently from the restaurant, and order more quantity of food on each transaction,” Guild said. 

Profitboss aims to make money by charging diners a $1.50 fee on each order, rather than taking a cut of each financial transaction. Guild believes that will make his platform competitively affordable at a time when COVID-19 has driven a devastating fall in profits for local restaurants.

Guild first started down the path of building Profitboss when his mother opened a dog grooming business in West Hollywood.

“She happened to pick a street that didn’t have a lot of car traffic, and didn’t have a lot of foot traffic,” Guild said, “and so finding customers for her dog grooming store was super challenging.”

She turned to her teenage son, who already had experience building social media accounts, for help. He in turn started asking people who ran their own local businesses, like a realtor, a personal trainer, a cosmetologist— even his local chamber of commerce.

“They basically told us ‘you got to buy ads on Facebook, post on Instagram, buy ads on Yelp, do direct mail receipt ads, and you’ll get this brand awareness in the community,'” Guild said.

Coming from the world of online marketing, Guild found the lack of precision in these strategies “backwards.” But his mother’s shop only had enough cash to stay open for a few more months, so he tried them anyway.

Ultimately, “they were really bad for two reasons,” Guild said. “Number one, we couldn’t measure if they were actually contributing to the growth of the business, like where the customers were actually coming from. Number 2, clearly they weren’t actually contributing new customers, regardless of how many impressions they told us that website link got, because there just weren’t that many customers in the first place.”

That led Guild to build his mother a webpage that used “conversion rate optimization,” marketing tactics designed to turn people viewing websites into actual customers. CRO are typically systems designed towards convincing website visitors to take certain actions, often by trying and measuring, different wording or offers to find the ones that work best.

“Within three months she ended up achieving her three year revenue projections and literally driving hundreds of thousands of dollars in sales,” Guild said.

Guild said he started applying his new system to other local restaurants and quickly began drawing customers, to the point where he signed contracts with big brands like P.F. Changs. But the advent of the U.S. outbreak of COVID-19 made it difficult and dangerous for restaurants to pull in physical customers, forcing him to turn the Profitboss model into one that addresses the difficulty of building relationships with remote customers.

“I just incorporated all that into a product, and then launched into the market, and it started taking off like wildfire,” Guild said.

Redpoint partner Alex Bard said he was impressed by Guild’s energy and character. 

“Everyone in this life faces different sorts of challenges,” Bard told Business Insider, “and some people succumb to those challenges. And some people really thrive out of facing that adversity. and he really thrived.”

Source Article