How Algolia CEO Christoph Janz grew Algolia to $100M revenue and 17K customers in 2024.

hello everybody my guest today is nicholas dussen he's a co-founder and ceo of coming out algolia the leading search and discovery api for websites and mobile applications launched in 2012 the company announced is used by over 5 800 companies around the world before algolia nicus spent over 12 years working on information retrieval at exilad and thales all right nicholas are you ready to take us to the top yes thank you for probably me nathan you bet so i'm hoping a lot of my audience has maybe seen your actually search tool kind of across some of their favorite websites but for those that have not used you before tell us what you do yeah so we basically help developers of the website apps like medium twitch under armor and users and powers their internal search so if you search on any of these companies you basically you are basically using us behind the scene that's great and what's the business model is it kind of a pure play sas company or how do you monetize your places it's only in the cloud so it's only subscription based we are going to have customers from like long tail of developers that are going to self-serve on the service we start at 35 dollars a month and we are going also to have up to bigger enterprises uh that can use us but we're speaking more of like upper six-figure deals per year there yeah um nicholas is going to be a tough question because your customers are so spread out but just because we are short on time if i forced you into an average what would you say the average customer pays you per month uh it doesn't make a lot of sense to be to look at the average uh long tail it's pretty small i don't even have a quick number there are you more focused on long tail or enterprise enterprise is eighty percent of our business today revenue let's say that five percent of our customers are going to bring about eighty percent of the revenue yeah there you go okay so let me ask that let me ask the question in your enterprise cohort i mean are we talking you know a thousand bucks a year ten thousand a million per year generally speaking what's acv there uh we're close to six figures uh in the range like 80 to 100k okay and the reason i ask that is i want to understand you know that's obviously a high enough price point where you can afford to put some touch on the sale do you have an internal sales team built out we do we do so we have like two go to market uh one is the self-serve side long tail of developers one is a really more higher touch sales driven very typical sas model where the team that is split in different segments smb mid-market enterprise with all the supporting functions from sales development to sdrs pdrs they are helping helping create more pipeline for the market and what's the ratio of how many sdrs responsible for how many aes oh that's a good question i'm not leading the cells it's about uh if i group strs and pdr together we're speaking about one uh between one and uh one four one one four two one sdr for supporting leads and demos for two aes or bdrs yes interesting and how do you i won't go too much deeper here but i am curious do you set them like they have to like cold email a certain number per month or per day or set up a number of demos like what what metric do you build around those roles uh when you look at the bottom line here it's more pipeline generated uh when we look at the rs and ptrs that's the most important for us so we also look at number of meetings i mean there is a lot of metrics we're looking at but at the end of the day what matters is how much taller dollars we can close and get in the bank so pipeline is the the the metric i looking at mostly on my side and what did you say total team size what out add everyone together uh you mean sales or like everybody on your on everyone in the company uh 300 okay 300 uh yeah over five offices today okay great so so spread out san francis headquarters central headquarters we started in paris who have a big team in paris all our engineering is there uh and what sales office is in london new york and atlanta oh very good okay and then you mentioned or in the in the intro you launched in 2012 so over the over the past six months how many logos have you grown too many paying customers uh we're about 6 000 customers right now oh great uh exactly the last six months i couldn't tell you uh but uh but yet six thousand today we're pretty much doubling over here sorry pretty much what uh dublin oh doubling every year that's great and then you said about five percent of those are actually enterprise so about 300 enterprise and the rest kind of long tail yeah that makes that good approximation yeah that makes good sense and then i mean i can kind of back into this right if you said kind of your enterprise acvs are getting close to that six figure mark that would put you somewhere around kind of 2.5 million today and that's just 80 percent of your revenue that's monthly is that generally accurate uh we're always looking at uh at the early thing uh yes that's pretty much the white ballpark we crossed the so we crossed the 20 million ar uh milestone last year and and pretty like we are going to close close to double this year so we're going to be over 40 minutes this year that's great um do you need these last 30 days to really get over the 40 hump or you're already over 40. uh we're we always want to get more so we always need the last few days to get even more yeah and as you know the holidays are a great forcing function to close your pipeline uh yeah i think the end of the quarter is the most important closing function for the the team uh because that's so important i mean you know that works for sales of course uh they have uh like of the comp that is the commission and so of course uh they have the motivation the right motivation to close as much as they can before the end of the quarter that's right um talk me through uh funding history i think you have raised how much total have you raised 74 million and why'd you decide i mean obviously once you're on that path you have to kind of stay on that path but why why couldn't you bootstrap this oh we could uh just wouldn't be the same company today for us it's more about like achieving the highest potential i mean the company has a high potential it would be such a shame not to give it our best and in our case in our market enforcement uh raising money to be able to go faster yeah and um you know one of the things that can limit growth sometimes is churn um how do you think about churn today and how do you keep it low uh it's a lot around uh making sure our we are delivering the right product to our customers and making them successful and so it's as we as we scaled we started to add customer success for the market deals for example but if i look back at the early days our users are developers really were implemented by developers and so we decided very early not to have any support team for example because we wanted to make sure everyone in the company was user facing and really felt the need and the paint of the customers so support was done by engineers so our customers when they had an issue they would directly reach out to our engineers and that was an expectation we said from today from day one with engineers which means that the product got way better i think that it would have if we had a super team video well nicholas let me role play with you right now nicholas i you just hired me as a senior engineer you're paying me like 180 grand in san franciso and you want me to answer support tickets i don't want to answer support tickets uh actually yes you should no i hate the role placing but no i think that's very important to have engineers who really care about the product they built and about the customers they serve you know actually it's such a satisfying feeling when uh your customers has an issue and you're able to solve and help them and see and receive that thanks that uh like really heartfelt uh thanks from the customers i think that's really a good thing it's all a matter of proportion you don't want to spend your days at doing that but spending half a day two two half days a month uh and throwing support is actually a great is that how you structure it each engineer has to spend basically one whole day per month on support yes and uh and as we speak we're actually creating a support team now dedicated support team uh mostly to be able to do 24 7 support and have a higher quality of support and response time that's right but we still ask our engineers to participate to that yeah so maybe that will is going to reduce a little but still going to be there and how effective has this been so what what actually is your churn per year today so we don't communicate about the churn but let's say that the most important here is really to have a net negative churn which we have you know for sas businesses you always try to look at both the dollar churn and the dollar upgrades from existing customers so what you want is to retain uh to have a increase in the retention of yeah expansion expansion more than makes up for your loss customers at the end of the year oh it's very good yes exactly which means that part of the when you start a year that the...