Mellowworks

Francesco Puttignano, a 30-year-old Italian nuclear engineer with an MBA who'd worked at a fast-growing ticketing marketplace, identified a massive inefficiency in how heavy industry executes work. Despite having systems to plan and account for work, field execution remained stuck in the analog era—teams relied on paper, WhatsApps, emails, and offline communication. At the end of each day, workers would return to the office to manually compile information into reports. It was a black box that nobody could see into, and Francesco saw an opportunity to digitize it.

When Francesco appeared on Conversations with Nathan Latka in December 2018, Mellowworks had just landed its first paying customer at $1,000 per month. The path to that first customer came through direct, boots-on-the-ground outbound sales. Francesco and his two co-founders did all the business development themselves, personally contacting construction companies and field-based enterprises. By the time of this interview roughly a year later, the team had grown to 20 customers—19 new ones acquired in that year and a half.

The company's growth split into two distinct customer segments with very different acquisition and value dynamics. Enterprise customers—6 of them—paid around $25,000 per year ($2,000/month on yearly contracts). The customer acquisition cost for these high-value deals ran between $5,000-$10,000, giving them a 4-month payback period. For enterprise deals, the product served as a field tool that integrated with customers' existing suite of products.

Smaller customers—a dozen of them—paid $1,000-$2,000 per year. These came mostly through inbound channels: Google search and LinkedIn marketing. The CAC for this segment was estimated around $2,000, with a longer payback of roughly one year. For these SMBs (often 3-person construction crews), Mellowworks functioned as their entire ERP system. This inbound channel felt less efficient but represented a massive untapped market: hundreds of thousands of construction and service companies with fewer than 10 employees across Europe. Francesco saw an opportunity to shift from 10-15% to 30-40% of revenue coming from this segment by doubling down on inbound marketing.

Churn was nearly nonexistent—they'd lost only one small $50/month customer, representing just 0.02% of revenue. This suggested either exceptional product-market fit or, as Nathan pushed back, potentially underpricing. Francesco acknowledged the tension: they practiced flexible, willingness-to-pay pricing, making nearly every enterprise customer pay a slightly different amount based on negotiation and custom configurations. But they hadn't yet pressure-tested their pricing ceiling.

By the time of this interview, Mellowworks had achieved ~$190,000 ARR (they calculated in euros, converting to roughly $190k in dollars). The company maintained impressive capital efficiency: they'd raised only $300,000 previously and were now closing a Series A of $1-2 million. With a team of just 6 people (all three founders still quota-carrying in sales), they maintained a net burn of less than $10,000 per month—down from $18,000 the previous year as revenue grew while expenses stayed relatively flat. They were spending roughly $25,000 monthly on operations.

Francesco emphasized that their low cost base and growing revenue meant they could weather the incoming recession (this interview took place during the early COVID-19 market crash in March 2020). The plan for the year ahead: open an office in Italy, continue aggressive enterprise outbound sales, and gradually invest more in inbound marketing to tap the massive long-tail of small construction firms across Europe.