August 2022 Investor Update
And an exciting opportunity to get involved in Mylance
Thank you for taking the time to read our August 2022 Investor Update. This update is a “special edition” where we’re going to provide a State of the Union for Mylance because there’s an opportunity to contribute given a recent investor’s interest.
Please make sure that these updates stay confidential. It's important that this content is not shared without our express permission.
And lastly before we get into it, one of the top venture firms in the world is interested in Mylance. An A16z (Andreessen Horowitz) Scout got in touch with me this week and after a lengthy convo and sharing our August investor update, is investing in us! See the bottom of this update for how you can participate.
Problem we’re solving
48% of an independent consultant’s time is spent doing non-earning, admin activities that include 1) Lead generation and 2) Back office admin, leading to millions of wasted hours each year.
Lead generation: to find clients, a consultant needs to communicate their value, network with dozens of "leads," scope out a project, negotiate a good deal, and sign an agreed upon contract. Of the 48% of non-earning hours, this takes up over half of their time.
Back office admin: includes invoicing clients, bookkeeping, estimated tax calculations, tax filing, time tracking for clients billed hourly, and signing client contracts.
Additionally, new consultants have many unanswered questions related to business set-up, how to present their niche, how to set their rate, negotiate well, etc. all in the name of getting their business off to a great start.
So Who is the ideal Mylance customer?
Experienced tech professionals with a minimum of 5 years of experience, ideally at successful start-ups or brand name tech companies. They specialize in a major business function such as Operations, Product, Marketing, Business Development, Sales or Strategy.
These folks have great experience, but many are tired of working for someone else and feeling undervalued. They’re highly ambitious, and want to work for themselves with flexibility.
The above is our target market today. As we build software, we will be moving downstream to offer this to more customers at a lower price point, and scaling internationally to service additional markets.
How big is this market?
Big. Really big. The skilled US freelance market at $99 per month would give us a TAM per year of $37.8 billion. And that’s just in the United States.
Here are some fun stats that get us excited:
36% of the US workforce (60 million Americans) freelanced in 2021 bringing in $1.3 TRILLION.
And these aren’t gig workers: 53% of all freelancers provided skilled services such as software development, marketing, and business consulting.
Many earn more than a W2: 44% of freelancers say they earn more freelancing than with a traditional job in 2021.
And they’re not going back: 60% of new freelancers agree that there is no amount of money that would convince them to take a traditional job.
More are entering the market: 56% of non-freelancers say they are likely to freelance in the future.
And the younger generation is leading the charge: 50% of Gen Z are already freelancing!
What we’ve built for these customers
Community to get inspired, learn, and collaborate
Project marketplace for hiring managers and consultants looking for talent
Access to experts to get their questions answered
Live, cohort based “Launch Your Business” Accelerator Program
Turn-key website (no design required) to showcase their consulting niche and collect leads
Consulting toolkit: invoicing software, CRM, proposal and contract templates
Tax and bookkeeping services
From a monetization standpoint, we have 4 products today:
$12,000 live, cohort based, high value Accelerator
$999 offline Accelerator (content from the above program)
$199 - $999 Tax subscription
$147 / quarter for access to our community + software suite
Traction to date
We’re counting traction as revenue. Users are nice, but if we’re not monetizing them, we’re not adding enough value or coming up with the right offer.
YoY, we’ve seen a 437.97% increase in revenue to date (Jan - Aug) after finding an offer that resonates with our customer and matching their needs with a willingness and ability to pay.
However, we’re focused on growing recurring revenue, which currently makes up ~30% of the total revenue (depending on the month).
We’ve seen a lot of traction with the number of HQs that we’ve approved and onboarded. As of August 2021, we’ve onboarded a cumulative 709 HQs, and are now adding ~100 new approved HQs per month.
Engagement in our software for these onboarded users has averaged ~33% over the past 6 months. While there are signs of PMF here, we know we have work to increase engagement, and we know getting more projects on the marketplace is the key.
How do we acquire customers and what is CAC?
Content and our own customer base are the two best ways we’re acquiring customers. We also offer a customer referral program, which has gotten some great results. We have done some paid ads testing, which yielded a CAC $24.18.
With additional capital, we would promote our high performing organic content. We know this resonates with our target user, and could accelerate growth by promoting it, mostly on LinkedIn and Google.
Right now, we’re working hard on the content strategy and referral program to acquire more organic leads, and grow the business with little additional marketing spend.
What about LTV?
The average paying customer on Mylance spends $1,610 (all time average), which is only past looking (not projecting any future revenue).
With that said, our customers often purchase additional products with Mylance, with ~25% converting to our Bookkeeping/Tax Subscription, which has an average MRR of $216 / customer.
Thus, the 18 month LTV of a paying Mylance customer is well over $2,000.
So, how does Mylance get more recurring revenue?
A Shopify-style platform that powers independent consultants, monetized by a subscription fee for access to the platform, and then the option to add on additional services (e.g., bookkeeping).
Recently, we started charging for the Mylance community and software product suite. We’ve currently charging $49/month for the platform, paid quarterly ($147 / quarter). While we just started this in late August, early results show people are willing to pay for this: we’re seeing a 24% conversion rate from approved customers to paying subscribers.
We KNOW customers want and are willing to pay significant amounts for tools and support for their consulting businesses. Thus, we need to capture and grow on this value.
Who’s on the Mylance team?
Mylance was founded by Bradley Jacobs in early 2020, and is now headed by Bradley and Gerardo (CTO), supported two other full-time team members, and multiple part-time contributors
Bradley Jacobs graduated from Duke University with a degree in Mechanical Engineering. He was a management consultant at Kaiser Associates for nearly two years across a number of industries and clients. Starting in 2014, he managed 9 markets in the North Carolinas for Uber Rides. By the time he stopped working for Uber in 2018, he had launched Miami and Milan for Uber Eats, launched Uber Freight, and managed the Carrier Operations team for Uber Freight for 2 years, building it up to a $1B valuation. After leaving Uber, he brought in $250k / yr as an independent consultant, living first-hand the challenges of consulting independently.
Gerardo Raiden joined Mylance in 2021 as our founding Engineer. He came to us with 20+ years of founder and early CTO experience including 4 years as the Co-founder and CTO of Boxful, the Co-founder and CTO of Bierful, both in Argentina. Gerardo has worked tirelessly in building, designing and implementing our HQ product from the ground up. He works hand in hand with the rest of the team to gather feedback and ideas from users to successfully create and implement iterations and additions to the product. We are excited to announce that in August ‘22 we promoted Gerardo to CTO, which is a well deserved advancement for all of the work and value that he adds to the organization.
Heidi Holzapfel joined us this year as our Operations Manager. Heidi graduated from Syracuse University with a bachelors degree in entrepreneurship. She went on to graduate with an MBA, also in entrepreneurship, from Syracuse shortly after. Before joining Mylance, Heidi was the Director of Operations at Jefco Sales where she monitored and managed all day-to-do operations. She attained a 19% increase in office staff productivity and a 12% reduction in costs. Heidi then opened her own business called the Soggy Dog Shop. She successfully raised funding by communicating the cause and building strategic relationships to ensure a successful launch. As a founder and entrepreneur, she led all planning, development, recruitment, and more.
The remaining staff are independent consultants who work part time at Mylance. These roles include a product manager, a web developer and marketing expert, several coaches for our Accelerator program, a bookkeeper and a virtual assistant.
So how can you get involved?
As mentioned at the beginning of this note, we’re going to be accepting an investment from an A16z scout. We are opening a quick round to be able to accept this investment, creating an opportunity to new investors to get exposure. This round will be a SAFE at a $14M cap (40% more than our $10M cap 1.5 years ago and we’ve 10x’d revenue in 2 quarters).
Please let me know via this 2 second form by EOD today if you would you want to get involved.
If you have any questions, please reach out!
Best,
Bradley
Bradley Jacobs
Founder and CEO, Mylance