Alphadoc Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Daan Stolk. He joined tech as an intern in the payments industry and then developed an excellent instinct for learning what is required for development processes. He also learned what caused friction for developers and companies maintaining their documentation. So today, he launched alphadoc.io, a developer experience platform to boost sales. Alright, Daan, you ready to take us to the top? [00:20] >> Yes, let's go. [00:21] Alright. So what does that mean, a developer experience to boost sales? [00:26] >> If you look at the market, APIs are everywhere and there's a lot of companies that are struggling with marketing their APIs. So existing doc platforms, they focus on providing a really nice documentation environment. But getting customers into your API requires more than just great documentation. It requires the whole experience. And it requires that experience to actually convert people into users. And building a platform that actually focuses on this is the gap that we're trying to fill [01:01] >> in the market. [01:02] And you sort of let people build these API, almost glossaries, general blocks, diagrams, API calls, response and redirects all in one shot, right? [01:11] >> Yeah, yeah. So what we're doing is we're plugging into your source code, into your open API spec and based on that, you actually get the tools to quickly scale up your documentation. So you're actually giving up all your flexibility, which you're accustomed to with traditional doc platforms and we're giving you templates and frameworks and you can work with those. So it gives you the benefit of not having to think about exactly how the doc portal should [01:37] >> be structured. We've we've figured that out for you. All you have to do is fill in the blanks. [01:42] That makes a ton of sense. Okay, when did you or I guess before we get into the history here, what are folks paying for this on average per month? [01:50] >> It's not something that people are paying for yet We're Okay. [01:54] So all free? [01:55] >> Yeah. It's well, it's actually it's a private beta. So, [02:00] >> customers in the beta, they're not paying today. They will in the future, but there's [02:05] How many are in beta? [02:07] >> We have 10 that we're actively working with, and we have about 40 beta customers for what we're calling long term opportunities. They're saying, hey, I want to make the switch, but I don't want to. I need a bit more features than what you're offering in your MVP. [02:25] What are they switching from? [02:27] >> They're switching from platforms like Readme, GitBook, their own open source tooling as well. [02:36] You said README or README? [02:39] >> Sorry, readme.io. Yeah. It's a docs platform. [02:45] I see. Interesting. Okay. So you've got 10 on the beta list now. When did you start building this platform? What year? [02:51] >> I think the idea started in December 2020. And it actually started out as a completely different idea. For the past, I think up until January 2022, we were validating and doing research. So I think we spoke with over did interviews with over 60 companies. And by now it's probably closer to 80 or 90 companies to validate what we're looking for. So we started out with something completely different with an API demo platform, but we quickly learned [03:25] >> that that's not what people are looking for. At least not the people that we were talking with. They're looking for a way that actually makes easier to build a developer experience and not just add more complexity. We're trying to solve this problem where people are having issues with finding the right employees, talented employees to help build out this developer experience. There's just Yeah. [03:46] Because it's it's boring. It's people would call it boring work. [03:50] >> Yeah. Yeah. Yeah. [03:51] Is. So how did you [03:52] so how did you find these 10 folks that are in the beta today? Where did you find them? [03:56] >> We started with just our own network and the ball got rolling really quickly. So we learned that on LinkedIn and on Twitter. If you send the right message to other founders indicating, hey, I'm working on this business idea, you're in the right space, we'd love to get even ten or fifteen minutes of your time. [04:22] >> People respond to it quite positively because people are always [04:25] Is asking that the exact text that you use when you LinkedIn message another founder? [04:28] >> No. It's specific to the founder. So it's tailored to what is the founder. [04:35] 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 [04:58] 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 [05:22] 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 [05:44] 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 [06:10] 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 [06:32] 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 [06:58] the interview. Can you read me one? Can you open your LinkedIn and read me one of the ones you did? [07:04] >> Oh, putting me on the spot here. [07:07] Well, because copy is really important with this. People get LinkedIn messages all the day. So when people say that we built this off cold messaging on LinkedIn, people are going, well, wait, I never respond to LinkedIn messages. What is what is Daan doing differently that I need to learn from? You know? [07:20] >> Yeah. Yeah. So let me see. [07:25] Oh, I gotta scroll and search a little bit. Right? [07:28] >> Yeah. [07:33] >> Okay, so here's one where I actually used a mutual connection. I said, [07:42] >> Hey, Founder. Obviously used their name. I think we know each other through mutual connection. We both used to work at company XYZ. I just started as a documentation consultant to pay the bills while I'm building my own sales enabling docs platform. Probably interesting to do a call. [08:03] Interesting. [08:04] >> I just realized actually that that's I completely forgot about it. But [08:10] >> when I started out, I started out as a doc sales consultant. [08:17] >> So my co founder always says I'm the Trojan horse. So I reach out to companies or people come to me and say, Hey, I need some help. I need consultancy work on my docs platform. So I come in and I say, first of what [08:29] did you make last year just on the consulting side of stuff? [08:32] >> I only ended up doing it for like for three days a week. I only did that for three months. And I think that gave me enough runway to pay the bills for four or five more months. [08:50] So what is that, like $20 you make or $10, $20 grand, something like that? [08:54] >> Yeah. Yeah. It's $30 k. That's what I made in those three months. I actually stopped doing it for this long because it's just too much work. It's just way too much effort. So I'm only doing small projects now and it works because what happens is I come in, first thing I say is, hey, I want be super transparent. I want to be as unbiased as possible, but I can't because I'm also building my own docs platform. And [09:19] >> then people are immediately interested in what I'm building. And sometimes it turns into something interesting and sometimes it doesn't. Sometimes I just act as a consultant. That actually helps because it keeps me completely in sync with what's happening in the marketplace. [09:34] Now, it's a great way to keep your ear to the ground. Now, have you funded the business yourself or have you guys raised capital? [09:40] >> We've raised capital. So we've done around with 15 sorry about my camera here. We've done a round with around 15 angel investors. [09:52] And when when did you close that round? [09:56] >> February. [09:56] And Okay. [09:57] How much did you end up raising? [10:00] >> 250,000. [10:01] Okay. Got it. By the way, whatever's happening on your thing, your video looks fine to me. So I wouldn't worry about it. [10:05] >> Oh, okay. [10:06] Okay. Yeah. So so 250,000 raised in a in a seed, sort of a seed round. Obviously, valuation and dilution management is important. Most people are selling like 20 in their seed. Were you sort of in that same range? [10:17] >> Yeah, 15%. [10:19] Okay. So you were like, what is that? A $850,000 valuation, something like that? [10:25] >> 15%. So it's [10:27] Oh, 1.5%. [10:29] >> No. Sorry. Oh, 15. One five percent. [10:32] Yeah. So that would be that would be about a oh, oh, oh, got it. Got it. Got it. So you you were like a 1,400,000, 1,200,000 valuation, something like that. Pre money. [10:41] >> 2,000,000. 2,000,000 valuation. Pre money. [10:44] 2 okay. So 2,000,000 pre, you raised $250 k, you said? [10:48] >> Yeah. [10:49] Got it. So so $250 k divided by yeah. Okay. Got it. So $250 k divided by 2,200,000 would be 11% that you sold, not 15%. [10:59] >> Yeah. Sorry. You're right. It's 11%. [11:03] Okay. Got it. Well, that's even better. [11:04] >> It's Yeah. [11:05] Yeah. Yeah. That's even better. How did you guys get I mean, walk us through that negotiation a little bit. How did you get to that valuation pre revenue? [11:13] >> It was easy. We realized that a lot of the ideas in the space, they're not really based on tangible data, right? You can say, oh, I have a lot of better customers that are prepared to pay x, y, z. But if you don't have product yet, it's still not really based on anything. So what did we do? We said, how much runway do we need? How much percent of the business are we willing to [11:37] What was the answer to that? How much runway did you want? [11:40] >> Yeah, so we said, let's get enough money to build an MVP with a small team of four or five people. Founders aren't getting a salary. We're bootstrapping ourselves. The whole point of the consultancy was that we don't take money out of the company. And it also keeps us super eager. We're, you know, we're fighting every day to build a company because [12:04] So what is what is burn? What is burn today then? How much are you burning per month? [12:08] >> We haven't started burn yet. [12:10] So That's [12:11] >> we're just about to yeah, we're about to hire our first dev. And we've been working with some freelancers, but those were one off payments. So that actually keeps us really lean. [12:24] Where did you find these freelancers and what did you have them do? [12:28] >> Personal network. We work with an amazing designer and we have a freelancer that's working as a software architect. So really helping us lay the groundwork. But this guy has a ton of experience. [12:43] Does the designer look Is the designer looking for more clients? Can you share his name? [12:49] >> Yeah, he's on our website. Stefan Yee. Yee is his last name, Y E. And he's on our website on Alphadoc. If you go to the team page, you can see his name. [13:00] So people could listen if they like your design and want to hire him part time. Could, right? Or is he full time with you? [13:06] >> No, no. He's part time with us. [13:08] I see. I see. Well, he did a great job. The website looks fantastic. [13:12] >> Cool. And then sorry. [13:13] And then who what was the other one? You said a software architect? [13:17] >> Yeah. Yeah. He's he's helping us out from architect point of view, and we just recently started working with him just two two or three weeks ago. [13:28] Yeah. He's not on the website yet, right? [13:30] >> No. He's not on the website yet. [13:32] Very cool. Listen. Yeah. Go ahead. [13:37] >> No. No. Sorry. [13:40] Awesome. Well, look, what I was gonna say is no, we're rooting for you. Let's wrap up here with the famous five. Number one, what's your favorite book? [13:49] >> Secrets of Sand Hill Road. [13:51] Number two, is there a founder you're following or studying? [13:55] >> No. But sometimes I feel like I'm married to my co founder. [13:59] So I [14:00] >> think I'm following him. [14:01] And number three, what's your favorite online tool for building Alphadoc? [14:05] >> Motion, an automated task and calendar scheduler. [14:09] Number four. How many hours of sleep do you get every night? [14:13] >> Seven to eight. [14:14] Okay. And what's your situation, Daan? Married, single, kids? [14:17] >> One baby on the way. [14:20] Cool. Married and a kid. That's very exciting. How old are you? [14:26] >> 29. [14:27] >> 29. [14:28] Last question. Something you wish you knew when you were 20. [14:37] >> Go for equity at your first startup. [14:41] Did you get screwed at your first startup? [14:44] >> No. I did. I don't feel like I got screwed, but I should have definitely made a case for equity. [14:52] Guys, there you have it. Alphadoc.io just raised $250,000 in their seed round at a $2,200,000 valuation. Currently, just two co founders relying on freelancers to get the MVP up. They help you build out your API documentation easier so that the developers are more likely to actually use your API. Again, not a sexy space, but definitely popular, definitely needs work. Daan is making this easy. He supported himself last year doing $30,000 in consulting projects before saying, okay, [15:16] I can now focus on the SaaS because he had enough personal runway. Again, now scaling, hopefully hiring three to four people this year to break out of beta and launch their first paid customer accounts. We'll see what happens. Daan, thanks for taking us to the top. [15:28] >> Thanks a lot. [15:30] 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 one [15:55] p. M. Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at two p. M. Central. 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 [16:17] 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 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 [16:38] are saying. Sign up 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 [16:58] 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. Alright, I'll be in the comments. See you.