Non-Technical Founder Building a Tech Startup to over $10M: David Moricca, CEO of Socialive (Part 6)

Sramana Mitra: What year did you launch Socialive?

David Moricca: July 2016 was when we first brought the product out. Then we rebranded it to Socialive in October 2016. The last five years, we’ve been Socialive.

Sramana Mitra: How did you price the product?

David Moricca: Early on, we were making up the pricing as we went along. Even to this day, pricing is an interesting one. You’re constantly refining. We played with a bunch of different things. The key to the pricing model isn’t about users; it’s about the distribution channel. We were really focused on distribution. Because we were selling to social marketing teams, they were small teams. They tended to have fixed budgets.

We just ended up realizing that people seemed to be willing to pay $15,000 to $36,000. Over time, we’ve gotten more sophisticated and thoughtful on our pricing. At that time, it was just throwing a lot of things on the wall and see who we could sell into.

Sramana Mitra: You were going for the bigger brands?

David Moricca: Pretty much right out of the gate, we focused on larger brands. We’ve evolved with them as well. With Facebook Live, I felt that the need was going to be with social marketing teams. That proved to be true. Frankly, even though I’ve been spending the last six plus years in the dance music world, the enterprise is something I understand best. I understood how enterprises worked and some of the communication challenges that exist internally.

Sramana Mitra: It monetizes well if you get a product-market fit. It’s not such an all-or-nothing game as the B2C world.

David Moricca: That’s a really good point. We were getting moderate scale at best. Even if we got more than moderate scale, it wasn’t still going to be a viable business. In B2B, you can quietly build a really nice business.

Sramana Mitra: Talk to me about the financial trajectory or the Socialive story. In 2016, how much revenue did you make? How did the revenue ramp? What financing strategy did you follow?

David Moricca: In 2016, revenue was still low. We were just getting started with sub-$1 million.

Sramana Mitra: That’s really good though – several hundred thousand dollars with a new product.

David Moricca: We knew very quickly that this has the potential to scale. Over the years, we had become so gritty. I didn’t immediately go to, “We need to raise venture now.” We didn’t go the institutional route. To this day, we haven’t raised institutional financing.

Sramana Mitra: That’s fine. I don’t have problems with that strategy.

David Moricca: We have built this muscle of being lean. Now we need to be thinking about the next stage of our financing. Up until that point, it wasn’t the case. Socialive didn’t raise a whole lot because the business had revenue.

Sramana Mitra: Enterprise revenue, once it starts to roll, is substantial. Enterprise revenue can carry you through without the need for too much external capital.

David Moricca: We tapped our existing investors during the Socialive journey. It was always to bridge to the next phase. We decided not to pursue institutional investment. We’re exploring that next phase of our business. The revenue started to grow. It scaled in the last two-plus years where we got into double-digit ARR numbers. We’ve been really lucky that the last dollars put into the company were in 2019.

Sramana Mitra: And you’re profitable?

David Moricca: We’re running cash-flow negative by a little bit. That’s by design. For much of 2020 and 2021, we operated more or less breakeven.

This segment is part 6 in the series : Non-Technical Founder Building a Tech Startup to over $10M: David Moricca, CEO of Socialive
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