8Base Revenue, Valuation & Funding (2024)

[00:00] Hey guys, recording this here on what is it? Friday the nineteenth. Maybe you're seeing this on Monday at the latest, but wanna let you know we are almost sold out for Foundercomp Sorry, Founder500 in Austin, Texas here in about a week. It's gonna be an amazing event. 500 B2B SaaS founders. I'm looking at the attendee list. There's almost 60 founders with more than $67,000,000 in ARR. It's an incredible group of group. There's over one and fifty [00:27] with more than 1,000,000, more than a million revenue. It's an incredible group. You don't wanna miss it. Grab your hotel, grab your flight, grab a ticket right now. I'll put the link in the bio, in the description here on YouTube. And I think there's only about three tickets left. Okay, about three tickets left. I'd love to see you guys there. Don't be bashful. Grab your ticket now. Hey, folks. My guest today is Albert Santalo. He's a [00:48] computer scientist and internet entrepreneur with experience in high growth venture backed technology companies. He's now building a low code development platform called 8base, recently made a nice pivot and looking forward to catching up today. Albert, you ready to take us to top? [01:00] >> Absolutely. Great to see you, Nathan. [01:02] Great to see you too. So my gosh, first off, this is a very competitive space. There's a ton of free tools. How are you positioning yourself? [01:10] >> Yeah, I mean, it's competitive and it's not. I mean, if you look at the real competition is people building things from scratch. So, I would say in some areas, yeah, there's been solutions that have come out and made a difference, but there's still a lot of greenfield opportunity here. I'd say we're in the first or second inning still. [01:28] Yep. Now you, when we last spoke, this would have been back in early twenty twenty one actually. You told me your largest customer was $240,000 a year. You had 1,200 customers paying on a $100 a month on average. You're doing about 1,500,000 in total ARR. I believe you were basically bootstrapped outside of a small seed round. How have things changed? [01:51] >> Oh my God, there's been a lot of change. So at the time we had, you know, 8base has always had the intention of being full stack low code, but we had essentially half the product stood up. So we started with the backend. We had a backend as a service product and we had a professional services offering that would help people use that backend. And so part of our bootstrapping and dogfooding strategy was to bring services to [02:19] >> the table, do large engagements that implement 8base while we were building out the rest of the product. So that rest of the product, which is all the front end tools, is now in the market. In the process of all this, we raised venture capital. So we closed the $10,600,000 round earlier this year. And, you know, we're in the process of shifting the business model. So taking the services side of what we do and instead of us [02:48] >> doing it ourselves, creating an ecosystem of external providers that do it on behalf of our customers. We've already got a seed, a bunch of those in place and we're building out more. And then really focusing our efforts on product led growth. So really implementing a product led growth flywheel and then a B2B sales effort that goes on top of that. [03:10] What's that mean? PLG flywheel. What's the free plan look like? And if so, where's the, where do people run into the paywall on the free plan? How do you decide what activation metric to use? [03:17] >> Yeah. And so the paywall that's up right now is only for the backend. So the front end tools are still free. We are going to combine that so that it's full stack pricing in the next few months. But for now we just want adoption of the front end tools. And so the free plan is pretty ample, but the way to think about it is it's going to give you a base level of backend capacity on AWS. [03:43] >> It's going to let you try out almost all. [03:45] That's literally storage, amount of storage or something. [03:48] >> Storage and computing capacity primarily. Yeah. So it's the full blown, all of it available through an API that exposes the backend. So if you're just using 8base for the backend, you'll have the ability to use our free tier with ample capacity. If you're using the full stack, the paywall will really start there with the deploy button. So we'll use a reverse trial where you get put into our professional plan for the first fourteen days, and then [04:16] >> you'll convert off of that. So you'll be able to use the deploy button for fourteen days, hopefully fall in love with the tool. And after that, you'll begin to pay at $25 a month. [04:27] You're using some interesting positioning words on your website. You know, things like the best, not just the best way to build like applications, the best way to build JavaScript applications. And there's niching down in a hyper competitive space can really work. So why JavaScript applications and what are other examples of how you're trying to focus on a specific niche? [04:46] >> It's interesting that you call it a niche and I love that because it's actually the biggest niche there is. So if you think about low code tools in general, they've all made people learn a new language, visual language, combination of visual and scripting languages, whatever. What we're trying to say is when you get into 8base, you should already know what to do if you're a JavaScript developer, of which there are about 14,000,000 in the world. So [05:15] >> it's the largest pool of developers around a language in the world. So if you're a customer, think about the benefits of using a low code tool that also brings with it fungibility from the developer side rather than train up developers on our stack at a high price point. [05:37] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually saves you a lot of time. Well, we've done this, we've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect [06:00] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [06:25] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is [06:46] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're [07:12] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but [07:34] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into [08:00] the interview. Talk to me a little bit about go to market in sort of the non traditional sense. You have 8base Academy, which I believe is new. A lot of founders struggle with content, especially a formal academy program where there's coaches coming in, there's recordings happening and how do you get eyeballs on it? So how have you structured this academy and is it working? [08:20] >> Yeah, academy is a great resource and we're probably in the third inning of building that out. Most of the emphasis on academy has been on the backend so far. So what you're gonna see come online is the front end tools as well, Plus, you know, nontechnical resource type education as well. Because when you're using 8base, you have to be at least quasi technical, but there'll be resources around nontechnical people and how to access our ecosystem to [08:51] >> get what they need built? [08:52] This can be a very specific question, but I think a lot of people like this. People love programmatic SEO where you can sort of do one thing, record a YouTube video, then it goes out a thousand places. You then push or put it back into an academy program. Something that looks like you've done well that frankly we're struggling with at Founderpath. You have taxonomy here. I can see 8base console or GraphQL or Resolver functions. Was that [09:11] a manual did you have someone manually go in and tag every piece of content with the right taxonomy so that your users can sort quickly? [09:20] >> Yeah. One of the things we did was transcribe every video so that the transcription is out there on the web and crawlable by Google, etcetera. [09:30] Is it working? [09:32] >> That's really Yeah. Yeah. I mean, it's helping with the keywords for sure. [09:35] Yeah. You're seeing more organic traffic that would be working. Yeah. Yeah. That's cool. That's very cool. Okay. Talk to me a little bit more about, you know, ARPU. Obviously, you raise a series A and by the way, you've had like amazing timing on a series that you closed it in March, right? [09:50] >> We did the first closing in February and the final closing in April. You know, look, I've been around for a while and I am a big believer in windows and this window felt like it was just open too long. And so given the nature of what we do, you need real money behind it. So I felt like we had proved out our model. We had gotten enough R and D done that it was time to like [10:19] >> step on the gas, augment the team. And so around mid last year, I started preparing and late in the year, got the term sheet that we wanted to see and then did the deal. [10:31] And most founders, they're doing sort of a series A like that, they're selling 10 to 15% of the business. Were you sort of in that same range? [10:43] >> Yeah. We were. [10:45] Yeah. Yeah. So that would have been something, you know, between like an 80 and 100,000,000 valuation. Something in there. [10:50] >> You're in you're in the range. [10:52] Okay. Fair enough. Was it a fair Do you feel like it was a Looking now, valuations have contracted. Do you go, oh, shit, how do I grow into this valuation now that the multiples are contracting so much? [11:01] >> Yeah. I didn't feel like it was a crazy valuation and I didn't, I didn't really want a crazy route valuation. What I was more interested in was who was the partner. And I'm just incredibly happy around that. So I never, I didn't, when we Who got was it? Who'd you pick? Yeah. So look, before I tell you, I didn't negotiate valuation on the term sheet. So I negotiated other things, but the valuation was something I didn't [11:28] >> touch. The partners, Foundry Group, and Chris Moody led the round. And I just, I have the utmost respect for them and Chris. And you know, the experience with them has just been phenomenal every step of the way. [11:46] Where'd you focus your negotiation power if it wasn't on valuation during the term sheet process? Were there sort of like board structure you were optimizing, ratchet clauses, liquidation, like what were you focused on? [11:57] >> It wasn't a little bit of board structure. [12:02] >> It was the cleanest best term sheet I've ever seen. And I've seen, I've seen at least a dozen in my day. And don't take it from me. Our lawyers said the same. They're like, wow, right? These are lawyers. So the negotiation was minor, minor stuff. I mean, was, it's probably not even worth talking about here. It's just like there was no ratchet provisions. There was no liquidation preference. There was no, none Yeah. Of [12:28] There's a lot of friction I hear around the series A negotiations on this stuff is, you know, the board structure is typically moving to either a three or five person board at the series A because you've got the seed with one seat, the series A with a seat, the founder or founders with the seat. But obviously, a founder doesn't wanna be in a position where there's two investors and then just the founder. So you typically create [12:50] two other seats for common to hold. Yeah. And sometimes the language around that board structure is such that it doesn't say Albert controls the three seats. It says the majority of common or whoever is currently the CEO controls a seat. But if those investors can change who the CEO is or do something to change your ability to keep the majority of common, you effectively lose control of the board. Did you like Maybe not on your term [13:15] sheet, maybe in the other ones you've seen in your past, like how do you think about board structure over time? [13:20] >> Yeah, so this is how founders lose control of their ventures. And you're probably going to eventually lose control of the venture unless you just have some, you know, something that's just off the charts. But you want to delay that as for as long as possible. So, and, you know, I've seen VCs come in that don't control the board, still control the board. So you got to be really, the more important thing is who your partner is. [13:47] >> It's not what the documents say. [13:49] How do they do that? How can an investor control a board, but it doesn't look like they control a board? [13:53] >> One example is number one, they're the most accomplished person at the table and they have the big war chest. They can keep doubling down in rounds and other people are running out of money for instance. And they're just, you know, they'll side with that investor because that investor is dominant, you know, so that that'll be one example, but there's probably a zillion examples. So, yeah, so in terms of board structure, we ended up with a three [14:20] >> person board with two independent seats. We're in the process of looking for one of those independents. [14:26] Wow. Foundry didn't require for them to protect their preferred shares with their own seat, [14:32] >> No, Foundry has their own seat. They have a Series A seat. Then there's a, we call it a Series C seat, but it's really controlled by Common and Series C voting together, which means that I control it. Yep. Then there's a CEO seat, which I sit in. [14:51] What are the two independent ones? And I thought you said you guys had two independents. [14:54] >> The two independent are just independent board members. Like we'll do a search and find people that we think are relevant within [15:01] Oh, so you're moving to five? [15:02] >> Yeah, we're moving to five. [15:04] Oh, okay. I misunderstood. I thought you said it was three today. [15:08] >> It's three today and then two more that will be approved once at least the fourth person's found. [15:17] Yeah, that makes a ton of sense. Going back to product velocity. So last time we spoke, I think you said you had about 38 folks on the team. How many are on the team today? [15:26] >> Right now it's about 60 or so. [15:29] Wow. And how many engineers? [15:36] >> Core engineering is [15:40] >> 40 or so. [15:41] Why do you use the word core? [15:43] >> Well, because I'm in that, you know, we've got product management, we've got our CTO, he's not in that number. You know, we're all involved in product. [15:53] Have you done anything to try and control burn over there, but still get the engineering resources you need like outsource? [15:58] >> We have a little bit of outsourcing going on. The outsourcing usually increases the burn. And then we we now have 30 people in Medellin, Colombia that that's that's recent news as well. So we [16:11] Why do you say outsourcing to Colombia increases the burn? Wouldn't it be more expensive to hire a full timer in New York or San Francisco? [16:18] >> Well, I think of that as offshoring versus outsourcing because it's our own company. [16:22] Ah, got it. [16:23] >> Outsourcing, we also have some consulting firms that help us as well. [16:28] I see. Yeah. So just to be clear, you consider the group in Colombia offshoring, not outsourcing. [16:34] >> Totally. Yeah. And it's a wholly owned sub of 8base. That we sell Yeah. From [16:39] It's not like a dev shop that you're getting a hundred hours per month in. I see. No, no, no. [16:45] >> We have a but few of that's not the mainstream. [16:48] So why would you put certain engineering specs or tasks into outsourcing versus your team that is wholly owned by you offshoring in Colombia? [16:59] >> It for a number of different reasons, but think of one of them just ramping up engineers fast. Some of these are like, know, hire temp to perm and things like that. And some of them are handling specific things. [17:13] Yeah, interesting. [17:15] Very cool. Okay. Talking about product, what's coming up next? Anything you can share? [17:20] >> Oh my God, there's a lot going on in product. So, as I mentioned, we had the back end. It's still, you know, it's very mature and going really well. We're beefing up the R and D as it relates to the back end, going to add more core services to help applications run. And then the front end tools are evolving super quickly. I think if you dug into those, what you would see is a very powerful low [17:46] >> code platform that operates with the flexibility of a framework. And that is a very, very hard thing to do. So like a web developer, React developer, Vue JS developer can come into an 8base and still feel like they're developing and they're not limited by the low code environment because of that flexibility in the way we've architected it. And then what you're going to see is that we're going to start bringing this whole product experience to be [18:13] >> full stack. Whereas today you can use the backend or use the frontend or use them together. The product experience is a little bifurcated. And so it's going to become one, even though you can still use the back end as a headless back end, or you can use the front end talking to other back ends. But the product experience will be more unified. [18:36] Guys, heck of a story here. Check it out at 8base.com if you want to again, no code your way to your SaaS MVP. It's a good way to go. Albert Santalo, thanks for taking us to the top man. [18:46] >> And Nathan, one quick thing. MVP and beyond. Like we've got clients now that that are are hyperscaling. So that's one of the big benefits of the product is just, you can start with MVP, but you keep going. You never have to replatform. [19:00] Guys, 8base.com. It's free to check it out. Go, go take a drive. Albert, thanks again, man. [19:04] >> Thank you, Nathan. Always a pleasure. [19:08] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM [19:33] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [19:55] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up [20:17] for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We [20:36] got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.

Introduction hey folks my guest today is albert santelo he is building a loco development platform called eight base.com albert you ready it takes the top absolutely nathan all right it's bubble there is a hundred million bucks a bubble overvalued or undervalued um i don't know the valuation but i can i can extrapolate it uh no i mean look they're we're we're all going after a very very big opportunity in the world so yeah bubble's done a nice job you've edited your sort of five word things you've been on the show before so now it says low code development platform maybe it was last time too but you i believe you actually started like doing like custom work but you know the space well you founded care cloud uh which is now publicly listed uh healthcare i.t sas you raised in excess of 100 million bucks like you know the game are you moving into more of a sas model yourself well in terms of when you say sas you mean the delivery of our product or you create the or the the companies we support it is yeah yeah it is very much of a sas product so you know you think of it as a platform of sorts but it's delivered through a sas mechanism right so it's absolutely a subscription usage-based um primarily but a subscription and so what are people paying for you and how much they paying per month on average it ranges from as low you know first of all it starts at free and it goes you know the largest customer today is at about twenty thousand dollars a month okay and what do they pay for what's the whole what's the big plan they just have you know hundreds of thousands of you know they've web scaled so they're a marketplace that has you know hundreds of thousands of mau's of monthly active users okay and what would you say the average customer is paying per month a couple hundred um we really got to break it down into just two segments so if you look at sort of the the product-led growth side where people can come in for free begin paying and so forth the the economics on that side are very different than the ones where we have more of a b2b engagement so on the on the average customer on the product led growth side is probably somewhere around 100 bucks a month and on the on the b2b engagement side is probably closer to 1250 1500 a month okay interesting and how many folks on the like self-serve model the self serve is somewhere around six thousand um those are those include free okay so to say holy crap you're at a Currently serving 1200 customers thousand a year ago so you okay so how many how many actually paying yeah um somewhere around 1200 yeah i could go to 200 new customers in the past call it six months or so where did you find those customers how are you how are you growing those are you know we're doing marketing to drive that um different forms of marketing but our our main thrust over the last 12 months has really been on the b2b side and tell me why or or how or you know why is that the focus two reasons so bigger dollars um better retention and we're getting ready to release the the you know this new part of our product which is all about front-end development and so that's going to offset a lot of the services that we're that we do today and so again how should people think of it you know the headline says build amazing digital products it looks very widget-y you know drag and drop but then you also have like a developer link in your top and services link in the top of your thing so like how much of your revenue over the next 12 months do you think these services versus sas service is still the the the mix is changing services still makes up the lion's share of it non-recurring revenue now is is somewhere around 50 of our overall revenue so recurring revenue has grown quite a bit in the last you know we don't publish the absolute numbers but recurring revenue has grown you know a couple hundred percent in the last last 12 months i mean i guess i can take the 1200 Monthly recurring revenue paying on the no code version this isn't getting all your revenue because you have enterprise accounts but 1200 on the low code version 100 bucks a month is you know what 120 grand a month in revenue there yeah we're well north of that but will you break 2 million run rate this year have you already broken it we have overall run rate absolutely so how aggressive are you trying to be this year we're trying to do triple digits overall wow okay so i mean do you think you can break like a five million dollar rank this year is it doable maybe like is that a comfortable goal or like a stress goal you know all right come on i told you we don't publish the number all right but now we know now we know between two and five so that i won't push you harder between two and five that's great so so tell me all about the thing because you're like in this beautiful spot where you have an agency that's done very well you're taking advantage like a no code platform you're building the platform now higher margin revenue no touch etc uh there's a lot of people that get stuck though where they try and run both the agency and the platform at the same time and neither one scales will you ever shut down the agency completely and go all in on the sas even if revenue takes a hit sure sure absolutely we were never founded to be an agency i mean the way to the way although it sort of looks like that what it really is is professional services to implement our platform so if you look at the history of enterprise sas in general that was always the case right so you you always you needed help implementing products even though our product is self-service a lot of times we run across non-technical founders etc or even larger enterprises that can't find the talent to use it and want our help and we do we do the services side at a world-class level but the idea is that over time we will transition the service aside to an ecosystem providers which we've begun to do we've begun to do that like we we have a small ecosystem of them now and we have our product we have a product uh that's eight base for the agencies to do uh that's it's a little bit different than the core product that you see on the website how do you raised additional capital Raised since 2019 are still about the 2.8 million total raised we we've we've closed we're we did a price round and closed uh the overall closing was 4.8 um that includes the conversion of everything before yeah he raised 2 million 2 million new something like that yeah yeah why did you need to raise i i wanted to raise to to put more money on the balance sheet given the heavy investment that we're making in both growth and in product especially remember we're launching a very significant new capability in our product which is the front-end development so we may do we may do a larger venture round coming up given given sort of the you know the metrics we put up and the opportunity that we're that we're looking at we're evaluating whether we do a larger venture around now the you know 1 million seed in 2017 1.8 in 2019 if you raise just 2 million now i mean would you call it a series a where you're selling you know 10 20 percent of the business would you call something else um yeah i would say it probably is a series a yeah interesting so like what what performance matrix do you think you need to get to before you can go raise a competitive series b oh series b um i'm not even thinking about that right now but uh well they're not saying that that's a bad question then let's let's look at somewhere else let me maybe i misunderstood are you saying the new round would be a series a or the well no the two million you just raised like you're raising it to go hit to go hit some metrics what metrics do you want to go hit yeah so we we didn't really call that a series a we called that more of a serious seed but if we pursue a larger round it would be a series a um you know the metrics i think the metrics we would need for that are pretty much there which is you know growth rate of you know recurring revenue a stable set of clients that have exceeded you know recurring revenue at least of a million dollars in in arr which you know that's not an issue obviously an enormous addressable market with a huge unmet need and i can explain a little bit more about that because you might say well low code there's a bunch of stuff but i can explain the difference and then our you know the other really good headline is our net retention rate so if you look at where we start to where we end up with a client in revenue you see a very significant increase in usage and upsell that happens so our next what is that retention it's it's somewhere in the 135 to 140 range that's great that's very good and what's your team today how many folks it's uh we're approaching onshore and offshore we're approaching 50. 50. what where onshore where do you like to offshore the most we have we have an office in st petersburg russia and we have uh we also have some folks in latin america how many engineers totally including offshore talent engineers total is probably it's it's above 30. yep yeah it was 22 it was 22 back in august of last year yeah so 30 now makes sense interesting and are they mainly spending their time building custom solutions for your clients or building your platform both so it's a split team so some of the team works on core platform and then other part of the team works on professional services and is it fair to say i mean what's in the market right now i haven't raised recently but when you go raise two million are you selling the pretty you know the standard 10 to 20 percent in the series seed um so let me think about that nathan so uh no we sold we sold less than that we got it so that's great because usually with a series c they have like an equity target of like 10 15 20 percent you were able to convince an investor to take less you know less which means less delusion for you yeah look i i largely did it as an as a i mean there are some new investors but largely did it as an insider rounds and because because we we throw off significant gross margins from the full service work we do you know we didn't we didn't have a huge cash need so yep yep very cool i would ask you what your valuation is but you're not going to tell me but i would assume it was north of 20 million bucks if you sold less than 10 i'm not going to tell you i'm not going to tell right now you guys have to read his body language and figure it out for yourself youtube all right okay very cool albert uh where's growth gonna come from man how are you gonna get up to you know five six seven million run rate yeah yeah so look we're gonna a lot of it nathan is gonna be as we release the full low code product um the front end development's going to be a major thing so today if you know i'm sure that 99 of the founders that you talk to that are building anything that really needs to scale are doing it from the ground up you're probably seeing more and more low code but a lot of the the platforms that are out there for building digital products they sort of break down at a certain scale or a certain level of complexity we're trying to we're trying to totally transform that so that you're thinking low code first you build an mvp because it's a good thing to build an mvp but an mbp vp that is light on features not light on architecture and so you can incrementally get to where you need to go and scale and truthfully never have to get off of eight base unless you are you know unless you're a really really big company with uh a certain set of requirements yeah guys there have it i were written for you man let's wrap up with a famous five number one favorite book um my most recent read was blitz scaling so i'm gonna go with that right now two is there a ceo you're following or studying oh wow uh cd ceo um shoot yeah i'm going to say the mailchimp founder yeah ben chestnut number three how many hours of sleep sorry what's your favorite online tool for building a base besides your own favorite online tool for building aimbase it would definitely be eight base um man i'm gonna go with the boring you know sort of envision but yeah at least you didn't say gmail okay number four how many hours asleep to eat every night i'm shooting i'm shooting for seven sometimes it's six sometimes at eight but i i've learned that my performance and my sleep are very much directly correlated and albert married single kids married kids married for a long time uh four kids wow okay how are you i'm i'm 53 i'll be 54 in a few days yeah hey congrats happy early birthday thank you thank you all right take us home here what's something you wish you when you were 20. oh man it's probably i'm probably going to give you the same answer i gave you the last time but it i'm going to say that it's like at the end of the day like as a founder we're always scared to death about risk and failure and so forth and the truth is at the end of the day you just got to go for it and uh life's too short and you know at the end of your life you're not going to care you're going to care about the risk you didn't take guys eight based down in 2017 they raised about 4.8 million dollars to date serving over 1200 uh sort of no touch customers they use the platform to build their no code products mvps from scratch and they also have an enterprise cohort as well call it north of a 1.52 million right now hoping to go to 5 million here quickly as they look to scale their platform revenue faster than their pure agency revenue they are doing that 135 net dollar retention to date as albert continues to scale albert thanks for taking us this off thank you nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys support all right i'll be in the comments see ya

Introduction hello everyone my guest today is albert santillo he's a computer scientist and internet entrepreneur experienced in building high growth venture-backed technology companies he's the founder and ceo of eight base and formerly founded care cloud and avisena albert you ready to get to the top hey how are you nathan i'm well man so what are you working on now what is eight base eight base is uh a platform that accelerates the development of what we would call professional grade software it's that's either used typically by by founders especially non-technical founders or by larger companies in their digital transformation efforts now is there a no code low code sort of play or are you an agency that's building stuff for folks it's it's sort of a combination of the two so it's it's a low code approach and i want to focus on the low code meaning that it it is a product used by developers um the idea is that you can build comprehensive products it's not something you have to throw away and the focus is on the back end so the low code platform primarily is on the back inside all delivered through a very powerful api and then most of the time our customers are building front ends that consume the back end but we also as a services company we also do that work for customers as well so sometimes we do full stack development on top of our low code platform for customers for people that hear this interview and say i just want to use the platform and not pay for services how can they use the platform what's the what's the model yeah so they can go to ebay.com they can sign in begin using it they never have to talk to us they can start using it for free but they can also you know the the paid use starts at 25 a month and it scales up from there they get a fair amount of capacity with that 25 bucks a month measured by what by storage api calls serverless invocations so think of it as utilization of the different aspects of the platform um and then number of developers so the 25 plan is for a solo developer and then it scales up for there of those three sort of ways that you can upsell customers and drive expansion revenue which one's most powerful people have the developer element the fastest the api column with the fastest or the storage limit the fastest um which you're saying which one do they hit the fastest in other words your ability to drive enterprise accounts and move from 25 bucks a month to 50 to 100 to up you you've put these things in place to make people upgrade storage limits api calls etc which one of those is the most powerful for driving up sell revenue it's usually things like continuous integration like you you did the 25 plan you're not using ci cd capabilities uh again it's solo developers so once you're in a team configuration uh it goes up from there got it so unlock continuous integration tools uh when people pay you more yeah the more things that larger organizations or would call it more established organizations are going to want i see i see okay and again still ignoring services revenue we'll get to that in a second if you just look at folks that are using either your free tool or not free sorry they're paying you for your to use your platform but not talk to you on average what are these customers paying per month would you say is the 25 bucks a month yeah i would say on average it's higher than that um because we have on some of those developer plans we have 200 a month type users we also have larger like we have agencies that use the product some of those are paying in the thousands one of those is ibm global services actually uses eight base for work they're doing in europe so you know they're they're all over the place right i know averages are unfair Average revenue per user for this reason but because it's a short interview i try and hyper focus it what if i forced you sort of into an average is a thousand bucks a month better than 25 a month or where's your sweet spot no i'd say in the developer channel uh it's probably you know the developer and sort of self-service channels by 100 bucks a month got it so it's usually like a two-person development team sort of thing you know a little bit more api usage but not like an ibm of the world yeah i see okay what's your backstory Company launched in 2017 here when did you launch the company 2017 um i've been a founder in the lead role since 2001. i'm an engineer by background but i've been in all of my companies i i've been the product designer but not the developer and you know i just you know my last company raised over 100 million dollars of venture money you know which company was that air cloud yeah and you know i just felt like we could build these products faster better cheaper there was a platform opportunity and i just felt like you know founders should be given the opportunity to to bootstrap more own more of their companies and retain control and that's never gonna happen if you have to raise a hundred million dollars i was gonna say i'm looking at the funding rounds right now on care cloud 186 million dollars raised uh 10 investors i'm looking at the people going my gosh the dilution must be not so pretty over time but you argue it's a much bigger pie yeah yeah yeah and but but but you know that kind of money brings a lot of risk yeah no i hear yeah it's not for everybody not for every founder for sure so what was the break this company looks like it's still going today so you made a decision at some point to say enough is enough i'm going to leave and build this what was the breaking point for you yeah so so both of my prior companies are still around they've both been acquired so for me it was in 2016 leaving the day-to-day and uh wanting to pursue this a base was something that was on my mind for at least 15 years and so i felt like the time was right the the cloud-based platforms have had come of age the market was started starting to recognize that low code was actually a thing yep and i felt like the technology stacks had stabilized to the point where we could do this and that i could bootstrap it so i also just you know for eight base i just didn't want to raise a huge amount of venture money so you're bootstrapped today yeah we're we're you could call it relative bootstrapping Raised we we've raised three and a half million dollars it's all been from angels and seed funds well come on albert you can you can't this is very binary you've either raised a dollar of funding or you haven't it's not like a middle so you are you have raised but you feel like you're not on the track of like oh my gosh we raise 186 million bucks we better double you every year or we're gonna go to zero yeah no i mean compared to to how much money i've raised before and how that's gone this is very different besides the fact that the company is profitable so we don't we don't need money that's great what's the team size Team size of 30 today it's about 30 people and can you sort of give me the break down there how many are engineers uh engineers is probably 20 to 22. yeah yeah that makes sense and what the rest any quota carrying sales reps yes uh we have one quota carrying sales rep and we have we have myself and another person not quota carrying sales reps that surprises me so you there is a sales motion here at a high enough acv where it does make sense to put a sales rep sort of touch on it a 100 percent especially and this is recent i would tell you there's two there's two things the services side certainly has a high enough acv to have sales people okay but the other thing is that some of these platform opportunities in these larger companies these are our multi-hundred thousand dollar deals right they can be seven figure deals so that's not gonna happen with marketing efforts on the website right you gotta you can't just swipe a credit card on a website and close a million bucks man i wish we could you and me both and i want to p i get two percent all right that makes sense so just to understand too the nature of like sas versus your service business it sounds like they're both material potentially if you just add up all your revenue over the past 12 months how much would you say is service sort of revenue versus low touch software revenue yeah so those percentages are changing but call it 20 the platform 80 uh services but the idea is that the the service revenue feeds the beast in lieu of venture capital while we build up the recurring platform revenue you know the margins on the service side are pretty good but obviously not as good as recurring revenue platform revenue right so but you know if i'm having a conversation with a vc about this you know it's like look we get it the service side not as scalable but we are innovating in our services group so that we can do things in a more scalable way there are technologies that we're using there and that are evolving to make things go really fast really consistent and be able to handle a lot of projects at the same time yeah i mean you answered my question before i asked it right which is vcs will hit software founders all the time for any services revenue because they want the founder to be reliant on vc money and dilution for extra cash not closing services deals that's le that have less margin but ultimately what you and i know is that sometimes when you put high touch in the form of a service contract on a smaller sas plan the net retention on that sas plan goes through the roof because you did so much great work onboarding and customizing for the client oh my god yeah no it's it's it's extraordinary we have we have a really fun business you know one of the things i really love doing you know my passion is building these products and it allows me to get involved and sort of lead the design of them and then and then my team just does an amazing job building them and and all of our customers are really happy that's great but you know a vc would tell you man this service aside you know it's a lot of work and i would tell them managing you is a lot of water [Laughter] fair enough i love that and you can say that because you you've walked you've sort of walked that walk already all right i say that jokingly i have lots of friends or vcs we even have some call it seed bun fun venture capital investors yeah but i think you know what i'm trying to say right i get it there are series a and there and after entanglements which i would much rather avoid if i can't no i hear you okay so 2017 you get going on this thing how many customers are you serving today on Currently serving 1000 customers sort of the software side on the on the software on the platform side yeah man it's like uh somewhere approaching a thousand or so okay and can someone are they dependent on each other can someone can someone pay you just for services and not platform or i know they can do just platform that is a great question so we only get involved when we're using our platform okay yes so if they pay you if ibm pays you a million bucks for a service contract they have to sign a subscription plan as well on the back end of that they do um and in ibm's case by the way there is no service revenue it's only platform i see so they have their own team of developers that have built on eight base not without our help on the services side but an example would be you know like for instance we have some founders in austin that we've built their products right and so they run on the 8-base platform and we did the development work uh to build on top of it they paid us a service fee but then they pay us monthly recurring revenue for the platform it's not easy to get i mean to a thousand customers especially when it's a devops sort of sale right uh i mean walk me through you got your first 10 customers back in 2017. so in 20 we and we've we've done a little bit of uh call it experimentation so when we first launched the platform we launched it for free and we launched it for developers so we tried to go sort of bottoms up developers and then along the way said you know look this is great but it's not really a business you know even after we launched the paywall um the paywall was last summer uh late you know probably about a little over a year ago about a year ago and um we just we just realized like developers is we want developers to love the platform we want them to support it we want them to bless it but b2b is really where the money is and i'm not i'm not the type of ceo founder that founds an open source company uh you know for me nothing wrong with it it's just not me right and so for me i gotta have a commercial business and uh when we're talking to developers it's one sort of conversation when we're talking to business owners especially like i said non-techno founders they just absolutely love what we bring because we bring a platform built for them that can hyper scale if they're successful they never have to rebuild the product they're talking to people that have built digital products used by millions of people funded by you know hundreds of millions of dollars of silicon valley money uh and we come in we step in we probably we typically are more well qualified than a cto that they could get at their stage and we take them to the next level at which point they can take back the software development or keep us engaged well so when you launched the paywall in 2019 did you have to go out and recruit non-technical people inside of sas founders with budget for this or did you try and convert some of your free developer base into paid customers first yeah yeah it was more the paywall was directed at developers okay so did they convert or did they not convert it it sounds like they didn't yeah yeah they did some did but it's not you know look at 25 bucks a month right um and again it's freemium it's not a free trial at 25 bucks a month you're just not gonna get there without ten tens of million dollars of venture money that's right yeah so how many how many freemium did you have before you launched paywall that i don't remember that um okay like thousands or hundreds of thousands no no no it would be it would be between a thousand two thousand probably okay got it so one to two k using for free which also by me by the way that is not easy even to build up that sort of sort of wait list or freemium usage base so you launch the paywall for 25 bucks in 2019 you realize you have to do this in massive volumes to get any sort of scale and then so when did you start thinking about the higher price stuff we we were already there so when we launched the product even in 2018 our first b2b client showed up saying hey we really love what you have and we love your capabilities but we want you to build the product and and so we we decided at that point let's take the deal and we uh we we did the work we got paid well for it and the outcome was phenomenal we had good margins the client was really happy what's well are we talking like a 50 000 sort of type deal or more and that deal was a 200k deal okay got it i mean there seems to be margin nice margin there yeah complex product so this is a multi-tenant sas okay appliance management product a very complex product but yes um there was there was decent margins there and our margins got better as we sold more of those deals you know so sometimes we do do you know we do smaller deals than that for sure but you know we also do larger ones so that company that you did the 200 000 sort of setup for the initial all that initial work what did they what do they now pay in sort of the low touch platform model you know every month a customer like that is probably at about 500 a month i see okay good interesting oh yeah but then what they get the way to think about it is they they can operate with no technical people it's devops free and it scales automatically for them if the need comes and albert i mean i'm hoping you're going to blow me out of the freaking water here they don't churn because if they churn they essentially lose 200 grand worth of investment they made initially right no they look they first of all we haven't had churn but but they can churn and and and i'm proud of the fact that they can because one of the things you'll see you'll see is that we built everything any base is built with standards so it's not like they can just export and go to the next thing but but their code is written in javascript or typescript they're using react or vue.js or whatever framework on the front end their data is in my sequel one of the big innovations inside of eight bases the graphql api graphql is a standard most you know the graphql apis that exist out there the engines that exist are not as powerful as ours but nonetheless with a little bit of retrofitting it could work and then there's other things that are inherent in the platform like role-based security and things like that but the idea is that we're not you know we're not like salesforce right we're like trying to lock somebody in with proprietary languages and all sorts of exotic things we're basically saying look if you want to leave you can leave but the idea is why would you ever want to yeah right and the other the other part of that is you don't need specialized developers like like i'll give you an example if you build on bubble right bubble's a great platform but if you ever need to get off of it because it's not scaling or whatever you're gonna have to rebuild the whole thing you compete with bubble indirectly you know indirectly they they they do more of the front end development but you know and certainly some people will build their products on bubble but what we find is that you know there comes a point where the it just doesn't scale for them so and it makes sense like they've got the ip related to what they built and what it looks like but it needs to be built from scratch again somewhere else yeah yeah that's bubble.io interesting okay so a thousand customers on sort of your your platform approach you mentioned earlier in our we've called 100 bucks i Monthly recurring revenue mean have you guys broken that hundred thousand dollar a month target at this point or if not win on the recruit on the recurring side just platform i know you do a lot more on services yeah we're we're like almost there that's great so this year you think you'll pass it in you know if we didn't have a pandemic i'd say yes but okay all right just really getting the flywheel going on sales you know so so i'm really excited about that piece of it you know all of my companies have had very high velocity sales force before and we truthfully started this company with more of i call it a marketing cadence but i'm really excited about just turning the flywheel on the sales side it's it's like yeah i mean help me understand the flag again we're only talking platform here so all listens or listeners understand there is an agency kind of service model here that makes a lot of money in cash flow but just on the platform play right so if you're caught around 60 70 80 right a month today where were you exactly a year ago on that oh my god we were uh a year ago man we were like nowhere on that like like very you know like how much almost at zero like not even three or four grand a month maybe something like that okay interesting um okay so i mean nice scale there right i mean what it what's changed from a year ago for you to add 50 60 grand a new mrr on the platform side i would say founder-led sales um tweaks to the paywall and uh and driving you know that developer channel a little harder but uh a lot of it you know a lot of it has been sort of founder-led sales so you're profitable today right yeah have you already invested the 3.5 million or is that sort of sitting in the bank some has been in some has been used some is sitting in the bank how do you the reason i'm asking is obviously everyone changes plans with covid you want to sort of save more and have a longer runway how are you thinking about that relative to your cash position i love that question so the way i'm the way i'm i'm looking at that is you got to lean in harder on sales so i i'm actually increasing investment on sales and marketing meaning you're hiring people or launching facebook ads or what it's a little bit of hiring people it's doing different types of marketing campaigns different types of marketing spend but absolutely we're we're leaning into it in terms of we're not we're not becoming more austere we're being conservative about about uh spending that is not core to either product innovation or sales makes sense okay last question here i just realized we're out of time before we before we wrap up what is gross return right now Gross churn on a monthly basis on a revenue monthly basis oh my god it's almost non-existent okay so you truly have i mean i want to make sure we're not like you know just you know spouting here you really have zero percent revenue return per month across a thousand customers paying about 100 a month yeah no no so so there is some churn on the developer side usually it happens early and usually it happens in the free tier right so it's like if you look at no ignore free i'm talking revenue churn revenue churn we had like for instance the first time we ever had somebody dispute a credit card transaction i heard about it for the first time two days ago in my daily stand-up call and so it's like and i don't know why the guy disputed it because we would have just given him this money back right but but his credit card disputes i mean some people will try your platform they'll pay a hundred bucks for a month and they'll leave because it wasn't fit for them like that's what i'm asking right it's like what is revenue turnover on a monthly basis it sounds like it's pretty low it's less than one percent fair enough okay less okay got it so less than twelve percent annually on that which actually it's pretty impressive for that price point you think so okay no no not i think so i mean i can compare it to two thousand other sas ceos i've interviewed at that price point that churn is extremely low usually in that cohort you're seeing churn that's 20 30 percent annually three to three percent a month part of it could be that by the time they're paying they've truly sort of kicked the tires on the product because the free tier is pretty good the free tier what the main the main thing it doesn't do is it throttles the api yeah so so um you can use the full product it's just when you want to open up the api what's the limit how many api calls a month on the free tier i think it's just i think it's how many if i remember correctly it's how many api calls sequentially you can do i think it throttles every 10. got it yeah your free tier i'm reading off your your pricing page here a thousand per month graph of ql api calls a thousand database rows or a thousand per month sort of you have actually a lot of utility-based upsells 500 mb in base storage 10 gigabyte minutes for serverless execution requests like all these things drive people to upgrade that's right yeah developers you look at what they get at 25 at 25 it's super generous it's like 10 it's it's well yeah it's massive i could easily see why people go up for that yeah yeah interesting so there's there's like if you're a small team of developers you can do a hell of a lot with that with that 25 tier you can yeah no i understand that very cool all right let's wrap up here with the famous five number one albert what's your favorite business book my god that's a moving target um right now it's blitz scaling number two is there a ceo you're following or studying ceo i'm following a study there's a bunch of those um yeah i would say look elon musk is certainly something i'm somebody i really respect a lot but i'm not trying to follow his playbook right now number three what's your favorite online tool for building your company beside your own um that made that may also be a moving target um right now we're messing around with apollo number four how many hours of sleep are you getting every night 78 okay and what's your situation married single kids married and kids how many four wives i'm just kidding all right four kids and how old are you albert how old am i i'm 52 52 last question what are you wishing you when you were 20 what do i wish i was doing when i was 20. no something you wish you knew when you were 20. oh my god um i would say that uh you know fortune favors the bold that you have to you just got to put yourself in the game go after it and uh and good things will happen guys there you have it eight base profession helping power professional grade applications in a low code sort of format 20 of their revenue is pure sas right now 80 services but it's highly productized service the pure platform play is growing and hopefully we'll break a million dollar run rate here uh middle of this year late this year but again they power a lot of their growth from their high margin services revenue consulting contracts so in the 200 000 sort of range they funded the company 3.5 million raised but they are profitable today team of call it 30 people 22 engineers albert scales this bad boy down there in miami albert thanks for taking us to the top thanks so much nathan