How 8Base Reached 135% Net Dollar Retention and 1,200 Paying Self-Serve Customers on a Low-Code Platform (Interview with Founder Albert Santalo)

Introduction and Bubble Comparison

Nathan Latka

00:00Hey, folks. My guest today is Albert Santalo. He is building a low-code development platform called 8base.com. Albert, you're ready to take us to the top?

Albert Santalo

00:08>> Absolutely, Nathan.

Nathan Latka

00:10Alright. Is Bubble... They raised a $100,000,000. Is Bubble overvalued or undervalued?

Albert Santalo

00:15>> I don't know the valuation, but I can I can extrapolate it? 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.

8Base Business Model and SaaS Transition

Nathan Latka

00:27You've edited your sort of five word things even on the show before. Now it says a low code development platform. Maybe it was last time too, but I believe you actually started like doing like custom work, but you know this space. Well, you founded CareCloud, which is now publicly listed but health care IT SaaS. You've raised in excess of a $100,000,000. Like, you know the game. Are you moving into more of a SaaS model yourself?

Albert Santalo

00:48>> Well, in terms of... When you say SaaS, you mean the delivery of our product or you Correct. Or the or the the companies we support?

Nathan Latka

00:54It is very much of a

Albert Santalo

00:56>> Yeah. It is very much of a SaaS product. So, you know, you think of it as a platform of sorts, but it's delivered through a SaaS mechanism. Right? Mhmm. So it's absolutely a subscription usage based, primarily, but a subscription.

Pricing and Largest Customer

Nathan Latka

01:10And so what are people paying for you and how much they're paying per month on average?

Albert Santalo

01:14>> It ranges from as... You know, first of all, it starts at free and it goes, you know, the largest customer today is at about $20,000 a month.

Nathan Latka

01:23Okay. And what do they pay for?

01:26What's the whole... What's the big plan?

Albert Santalo

01:28>> 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 MAUs of monthly active users.

Average Customer Spend by Segment

Nathan Latka

01:40Okay. And what would you say the average customer is paying per month? Couple 100?

Albert Santalo

01:46>> Really got to break it down into just two segments. So if you look at sort of 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 b two b engagement. So on the on the average customer on the product led growth side is probably somewhere around a $100 a month. K. And on

02:11>> the on the b to b engagement side is probably closer to $1,250, $1,500 a month.

Nathan Latka

02:17Okay, interesting. And how many folks on the self serve model?

Customer Count and Self-Serve Funnel

Albert Santalo

02:21>> The self serve is somewhere around 6,000. Those are those include free.

Nathan Latka

02:26Okay,

02:27so to say holy crap, you're at a thousand a year ago. So you Okay, so how many how many are you paying?

Albert Santalo

02:32>> Yeah. Somewhere around 1,200.

02:37>> Yeah. Okay.

Nathan Latka

02:38Good to 200 new customers in the past call at six months or so. Where did you find those customers? How are you? How are you growing?

Albert Santalo

02:43>> Those are, you know, we're we're doing marketing to drive that, different forms of marketing. But our our main thrust over the last twelve months has really been on the b to b side.

Nathan Latka

02:56Mhmm. And and tell me why or or how or, you know, why is that the focus?

Albert Santalo

03:00>> Two reasons. So bigger dollars, 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. Mhmm. And so that's going to offset a lot of the services that we're... That we do today.

Revenue Mix: Services vs Recurring

Nathan Latka

03:21Mhmm. And and so again, how should people think of it? You know, headline says build amazing digital products. It looks very widgety, you know, drag and drop. 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 twelve months do think we services versus SaaS?

Albert Santalo

03:36>> Service is still the mix is changing. Services still makes up the lion's share of it. Non recurring revenue now is somewhere around 50% of our overall revenue. So recurring revenue has grown quite a bit in the last, know, we don't publish the absolute numbers, but recurring revenue has grown, you know, couple 100% in the last twelve months.

Run Rate Discussion

Nathan Latka

04:01Yeah. I mean, I I guess I can take the 1,200 paying on the no code version. This isn't getting all your revenue because you have enterprise accounts. 1,200 on the low code version and $100 a month is, you know, what, $120,000 a month in revenue there.

Albert Santalo

04:13>> Yeah, we're well north of that.

Nathan Latka

04:15We break 2,000,000 run rate this year. Have you already broken it?

Albert Santalo

04:18>> We have. Overall run rate? Absolutely.

Nathan Latka

04:21So how aggressive are you trying to be this year?

Albert Santalo

04:23>> We're trying to do triple digits overall.

Nathan Latka

04:26Wow. Okay. So I mean, do you think you can break like a $5,000,000 run rate this year? It doable? Maybe.

04:33Like, is that a comfortable goal or like a stretch goal?

Albert Santalo

04:38>> Right. Fair enough. I told I told you we don't publish a number.

Nathan Latka

04:41All right. But now we know. Now we know between two and five. So that's that I won't push you harder between two and five. That's great. So so tell me 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, etcetera. There are a lot of people that get stuck though, where they

Agency vs Platform Strategy

Nathan Latka

04:59try 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 SaaS even if revenue takes a hit?

Albert Santalo

05:08>> Sure. Sure. Absolutely. We were never founded to be an agency. I mean, the the way that 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 SaaS 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 nontechnical founders, etcetera,

05:34>> or even larger enterprises that can't find the talent to use it and want our help. And we do the services side at a world class level. But the idea is that over time, will transition the services side to an ecosystem providers, which we've begun to do. We've begun to do that. Like we have a small ecosystem of them now and we have our product. We have a product that's 8base for the agencies to do that's a

06:01>> little bit different than the core product that you see on the website.

Funding History and Recent Round

Nathan Latka

06:04Have you raised additional capital since 2019 or still about the 2,800,000 total raised?

Albert Santalo

06:09>> We we've we've closed where we did a price round and closed. The overall closing was 4.8. That includes a conversion of everything before.

Nathan Latka

06:22Yes, you raised 2,000,000, 2,000,000 new.

Albert Santalo

06:25>> Something like that.

Nathan Latka

06:26Yeah. Yeah. Why why do need to raise?

Albert Santalo

06:29>> 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 a front end development. So we may do a 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

06:55>> evaluating whether we do a larger venture round now.

Nathan Latka

06:58The, you know, $1,000,000 seed in 2017, one point eight in 2019. If you raise just 2,000,000 now, I mean, do you call it a series A where you're selling, you know, 10%, 20% of the business? Would you call something else?

Albert Santalo

07:09>> Yeah, I would say it probably is a series A.

Nathan Latka

07:13Yeah, interesting. So like what performance metrics do you think you need to get to a free and go raise a competitive series B?

Albert Santalo

07:19>> Oh, series B? I'm not even thinking about that right now, but

Nathan Latka

07:24Well, then let's not... That's a bad question then. Let's let's focus somewhere else then.

Albert Santalo

07:28>> Let me... Maybe I misunderstood. Are you saying the new round would be a series a or the

Nathan Latka

07:33Well, no. The 2,000,000 you just raised, like, you're raising it to go hit to go hit some metrics. What metrics do you wanna go hit?

Series A Metrics and Net Dollar Retention

Albert Santalo

07:39>> Yeah. So we didn't really call that a series A. We called that more of a series seed, but if we pursue a larger round, it would be a series A. 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, stable set of clients that have exceeded, you know, recurring revenue, at least of a million dollars in ARR, which, you

08:07>> know, that's not an issue. Obviously, an an 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 and revenue, you see

08:29>> a very significant increase in usage and upsell that happens. So our net retention.

08:36>> It's it's somewhere in the 135 to 140 range.

Team Size and Engineering Headcount

Nathan Latka

08:41That's very nice. That's very good. And what's your team today? How many folks?

Albert Santalo

08:45>> It's we're approaching onshore and offshore, we're approaching 50.

Nathan Latka

08:4950. What what what where onshore? Where do you like to offshore the most?

Albert Santalo

08:55>> We have we have an office in Saint Petersburg, Russia, and we have we also have some folks in Latin America.

Nathan Latka

09:01How many engineers total, including offshore talent?

Albert Santalo

09:06>> Engineers total is probably.

09:12>> It's above 30.

Nathan Latka

09:13Yeah, yeah, it was 22. It was 22 back in August of last year.

Albert Santalo

09:18>> Yeah.

Nathan Latka

09:18So 30 now makes sense. Interesting. And are they mainly spending their time building custom solutions for your clients or building your platform?

Albert Santalo

09:26>> Both. So the split team. So some of the team works on core platform and then other part of the team works on professional services.

Nathan Latka

09:34And is it fair to say, I mean, what's in the market right now? Haven't raised recently, but when you go raise 2,000,000, are you selling the standard 10 to 20% in that series?

Albert Santalo

09:46>> So let me think about that, Nathan. So no, we sold we sold less than that.

Nathan Latka

09:52We got it. So that's great because usually with a series C, have like an equity target of like ten, fifteen, 20%. You were able to convince an investor to take less, you know, less, which means less dilution for you.

Albert Santalo

10:01>> Yeah, look, I largely did it as an as a I mean, there are some new investors, but largely did it as an inside round. And because because 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.

Nathan Latka

10:18Very 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 $20,000,000 if you sold less than 10%.

Albert Santalo

10:25>> I'm not going to tell you.

Growth Plans and Low-Code Vision

Nathan Latka

10:27I'm not going to tell you guys have to read his body language and figure it out for yourself. YouTube, all right. Okay. Very cool, Albert. Where's growth gonna come from, man? How are you gonna get up to, you know, five, six, 7,000,000 run rate?

Albert Santalo

10:37>> Yeah. Yeah. So look, we're gonna, a lot of it, Nathan, is gonna be as we release the full low code product. The front end development is gonna be a 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 platforms that

11:01>> 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 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 MVP... 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

11:28>> get off of 8base unless you are, you know, unless you're a really, really big company with a certain set of requirements.

Famous Five and Closing Remarks

Nathan Latka

11:37Yep. Guys, there you have it. Albert, we're rooting for you, man. Let's wrap up with a famous five. Number one, favorite book.

Albert Santalo

11:44>> My most recent read was Blitzscaling. So I'm gonna go with that right now.

Nathan Latka

11:48Two, is there a CEO you're following or studying?

Albert Santalo

11:51>> Oh, wow. CD... CEO.

11:56>> Shoot. Yeah. I'm going say the Mailchimp founder.

Nathan Latka

12:00Yep. Ben Chestnut number three. How many hours of sleep? Sorry. What's your favorite online tool for building 8base besides your own

Albert Santalo

12:06>> favorite online tool for building 8base? It would definitely be 8base.

12:13>> Man, I'm gonna go with boring, you know, sort of InVision. Yeah. At least

Nathan Latka

12:18you didn't say Gmail. Okay. Number four, how many hours of sleep do you get every night?

Albert Santalo

12:22>> I'm shooting I'm shooting for seven. Sometimes it's six, sometimes it eight. But I... I've I've learned that my performance and my sleep are very much directly correlated.

Nathan Latka

12:31And, Albert, married, single, kids?

Albert Santalo

12:33>> Married. Kids.

Nathan Latka

12:34How many?

Albert Santalo

12:35>> Married for a long time. Four kids.

Nathan Latka

12:38Wow. Okay. How are you?

Albert Santalo

12:40>> I'm I'm 53. Be 54 in a few days.

Nathan Latka

12:43Yeah. Hey. Congrats. Happy early birthday.

Albert Santalo

12:45>> Thank you. Thank you.

Nathan Latka

12:46Alright. Take us home here. What's the minuition you when you were 20?

Albert Santalo

12:49>> Oh man, it's probably good. I'm probably gonna give you the same answer I gave you the last time, but I'm gonna 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 life's too short. You know, at the end of your life, you're not going

13:09>> to care. You're going care about the risk you didn't take.

Nathan Latka

13:12Guys, 8base founded in 2017. They raised about $4,800,000 to date serving over 1,200 sort of no touch customers. They use the platform to build their no code products and MVPs from scratch. And they also have an enterprise cohort as well, call it north of a 1,520,000 run right now, hoping to scale to 5,000,000 here quickly as they look to scale their platform revenue faster than their pure agency revenue. They are doing that 135% net dollar retention

13:36to date as Albert continues to scale. Albert, thanks for taking us to this op.

Albert Santalo

13:40>> Thank you, Nathan.

Nathan Latka

13:43One 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

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