How Adapty CEO Kirill Potekhin grew Adapty to $6.9M revenue and 200 customers in 2024.

hello everyone my guest today is vitali davidoff he is building a company called adapti as the founder and ceo they recently went through 500 startups and they're helping people think about how to a b test pricing and paywalls natalia you ready to take us to the top yeah all right so when did you guys launch the company uh so we launched the company in october 2019 2019 when did you go through 500 um so we were applied that uh october 2020 and graduated just in february okay so tell me a little bit about like why your brain is uniquely positioned to think about a b testing and pay walls did you have some horror story in your past about pricing or what's the background yeah um so first of all we're doing a b testing and payables all about mobile internet purchases it's pretty important and it's all started back in 2016 when me and michael founder were working at easy10 so in 2016 z10 was a top five mobile language learning application so it was it was pretty huge new european years and mobile subscriptions and i was the one responsible for price testing and user acquisition and i think for the next two years we tried everything possible so you know we did we bought a lot of traffic we did different experiments from you know different trials and etc and one day we decided you know you know we built an internal prototype and we decided one day hey maybe we can build a different kind of business out of it you know we solved our own problems and decided to build just a global product and that's how we started adapting so we have our own experience working with it so you launched in 2019 now did you build for like a year with no customers or did you have any revenue in 2019 so in because we we started development in october we uh we didn't have any clients in in 2019 and we had we got our first client in in january 2020 with the first super early version and during the next four months or even five months we've been doing more you know beta and testing how we can do it how we can manage it and etc and then we launched publicly on product hunt in june 2020 and since that you know starting acquiring new users tell me about the product hunt launch how many upvotes did you get and were able to convert the product onto users into paid customers it's a good question um so uh it was a pretty you know for us it wasn't any kind of milestone so we just decided hey maybe it would be cool to celebrate it with the protocon launch and so we created you know creatives and just and just launched it we didn't buy any up votes so we are going to get over 500 as i remember upfolds i don't remember the exact number right now yeah it was four it was healthy you got about 405 up votes yeah uh completely organical and healthy and i think we got maybe 10 customers out of it i really don't remember i mean back in this time we didn't measure our marketing performance so it was also almost all organic so so i mean how many customers are you serving today so we are serving a couple of hundred of mobile developers um you know and in total we serve over two million of subscribers so because our clients are mobile apps with subscriptions and we cover hundreds of them and we serve over two million of end subscribers i mean physical people yep so you're mainly selling you're mainly selling to the developer then not a marketer um i would say that we're selling to software companies but our clients mostly are marketers because adapti is built for yeah adapt is built for two two kind of people first of all it's for developers because we significantly increase the speed of deploying and implementing an app subscriptions and second and mainly it is built for marketers because it can dramatically increase you know your conversion rates yeah but that sales process is very different selling adapted to a marketer is very different than selling it to a developer so when you look at people actually paying for your software is it mainly the marketers the cmos or is it mainly developers the ctos um it depends on on features that they want to use so i think maybe it's 50 50 to between ctos and cmos i see okay got it and and again starting 200 today now you have obviously we have to talk about your pricing after all you are a pricing optimization tool so you have a free plan and then a 99 per month plan and then sort of a pro plus option what's the average customer paying you per month right now uh i'm not sure that i can disclose this information right now if it's fine um but our plan is dynamic i mean uh pro plan is starting with the 99 per month but it's extending uh more as you grow so it has a dynamical dynamical um point here just to be clear though so it's fair to say that all paying customers are paying more than 99 per month some of them are paying much more yeah yes of course so so help me understand again a lot of satisfiers when they launch they don't know how to drive upsell revenue or you're calling it dynamic revenue right what's the dynamic thing that you upsell against so our thing is a revenue so we have some revenue threshold which is 20k per month and if you're a developer you use adaptive 4.99 per month flat if you're below 20k but after that you pay 599 on every thousand if you're greater than 20k does that make sense oh wow yeah yeah yeah and and so i guess i guess that's easy to explain to a new potential customer but why did you decide to have that be like the driver for example i i could say look a lot of our revenue growth has nothing to do with adapti but now i'm paying you 599 for all the extra revenue we're tracking like this doesn't feel fair we believe it it feels fair um and the reason is as more you grow as more technical issues you have and as more you know as as bad it is for you to have any issues with your billing system right and it's as it's more harder to run experiments as you grow bigger and bigger so that's why we believe our model is fair you know if you compare 10k per month's mrr versus one million per month samurai they're completely different in how they grow you know in server loads and etc so yeah we believe it's it's kind of fair of course we provide the volume discounts is super big but yeah we think it makes sense how much total mrr is falling through your system currently i don't know maybe um maybe over 20 million i think even more yeah i mean that's the number right if you grow that to hundreds of millions or a billion i mean that's obviously a great indicator for the business yeah and do you do you did you build this did your old uh boss at the at the prior company guys came from are they paying for the software uh sorry what do you mean you guys said that you have this problem at your past company so naturally one of your first customers should have been your past company is your past course of course so they joined yeah of course they joined as a you know first first company and they were testers of course yeah talk to me a little bit more about the team how many of you guys are there so now we're a team of 15 people and by the way on our landing page you can find a page for a team and jobs just in case yeah and we're a team of 15 people and three founders and all these guys with whom we founded the company we worked before and we found a company before so it's not our first company so three co-founders how many engineers are on the team seven seven engineers okay and when you when the three of you guys came together to launch the business i mean the most dilutive event in any company's history is your co-founders and then it's your seed round usually how did the three of you guys decide how to split equity um i don't know we just negotiated i mean it it wasn't a big problem for us so we just discussed um depending on our you know and responsibilities it was just split did it so i i think we did it pretty fair way did you guys just do 30 30 30 no okay so yeah so so that that's what i'm getting at right explain why somebody would get a little bit more in terms of what value they're bringing to the business um i think it depends on again responsibilities because companies sometimes can live without somebody so i strongly believe company cannot live without ceo that's for sure most companies cannot live without head of sales and cmos but probably you can live without you know cpr you can hire cto it depends on your business um that's super simple so given these numbers and given this idea you can calculate your equation are all of the are all of your founders still active crunchbase only lists you and koreal did you guys have a bit of a co-founder fallout who's the third co-founder uh yeah we did in the third co-founder uh he is a vp of sales and ceo oh you added one later yeah a bit later maybe we had him in in april okay okay got it that makes good sense so 15 people on the team three co-founders seven engineers do you have any quota carrying sales reps or no uh we have advisors and uh we have some other guys like designers you know you have no one full time that is managing a quota currently no okay okay got it interesting and then talk to me about how you funded the business um i think you raised some from 500 startups how much have you raised to date yeah so we started...