How Approveit Reached 700 Users and 300% Year-Over-Year Growth with Slack-Native Spend Approvals (Interview with CEO Serge Gusev)

Host Intro and Company Overview

Nathan Latka

00:00Approveit. Today, guys. They are effectively expense management inside of Slack. They launched on product hunt in 2021. 500 upvotes got their first paying customers. Today, they've got over 700 users on the platform. A couple 100 of them are paying somewhere between, call it, $200 to $400 bucks a month in revenue. He does feel like they can break a $100,000 a month in revenue this year if they are able to close this $1,000,000 round of funding they're looking for.

00:21They closed a 170,000 pre seed round last year at, call it, somewhere between a 3 and $5,000,000 cap that was on a safe note. Got two cofounders, team of seven today, and then another two that are part time as they look to continue to build, again, not just expense management inside of Slack, but also expanding to other marketplaces and also expanding to other use cases. Hey, folks. My guest today is Serge Gusev. He's the CEO and

00:45cofounder at approveit, the number one product of the day on product hunt, top 10 growing workflow automation software according to SaaSworthy. He's a tech geek and entrepreneur, product owner, and expertise with business process automation. That's what he's building up today. It helps you spend approval send approvals in Slack, MS Teams, and email. Serge, you ready to take us to the top?

Serge Gusev

01:04>> Yep.

Product Hunt Launch History

Nathan Latka

01:05Awesome. Alright.

01:06So

01:07what what day did you launch on Product Hunt?

Serge Gusev

01:10>> Sorry. Say again?

Nathan Latka

01:12What day did you launch on Product Hunt?

Serge Gusev

01:14>> Oh, it was like couple of months ago, actually. I think, yeah, somewhere like February or March last year, something like that.

Nathan Latka

01:22And when you launched on Product Hunt, is that where you got your first customers or did you already have paying customers?

Serge Gusev

01:27>> Actually, we have a long start with Product Hunt because we did, I believe, three launches already. And so the first launch was around a year ago, maybe a year and a half. The thing is that that time we got top three product of the day, but the product was really bad, it was just testing the idea. And at that time, we got a lot of feedback that the idea is great, but product sucks, so please do

01:47>> something about it. And then just next six months was spent just iterating on the feedback we got from customers until we finalized the platform. Like in some form that we have now, now it's like, of course, more advanced, but at least at that time, we was able to launch again. And at that time, we got, like, number one product of the day at Product Hunt. We also got a lot of positive feedback, first paying customers, first

02:10>> investors. So

Nathan Latka

02:12Yeah. This was back you launched exact almost exactly one year ago. You got 510 upvotes that day and a 104 comments. That post today has over 1,600 upvotes, 5,700 reviews. How many new users did you get one year ago when you launched on Product Hunt? Do you remember?

First Customers and Conversion from Launch

Serge Gusev

02:28>> I would say, yes, somewhere between, like, 20 to 30 new users. And among those, some paying customers, I would say around 10%.

Nathan Latka

02:37You got 20 to 30 users?

Serge Gusev

02:39>> Yep. Yep. It's like the active users. I think sign ups was around a couple of hundreds, but, yeah, in terms of active users.

Nathan Latka

02:45And what? Like, three to four of them? Three or four signed up as paid?

How Approveit Works

Serge Gusev

03:04>> Yeah. So actually approveit allows you to automate your spend approval workflows. And basically you can create like, as an admin first, can set up the workflow using our like virtual builder, like visual virtual builder templates and integration we have. Once you set up this like frameworks, this pipeline of the process, the end users, like people you're working with, they can just in Slack or Microsoft Teams or over email, they can just initiate new approval request, add

03:30>> all the information, like, I don't know what spend date, like how much should be spent, which item, etcetera. And all they gotta do is just click submit. The request automatically goes to the, like, right set of people based on the inputs. So like based on the category, based on the amount, etcetera. And once all the sign offs are granted, you can also automate the post approval actions. So you can first, like, all the approvers will get

03:53>> notification in Slack. They will be able to approve the request in Slack. And then once you get all the approvals, you can also add this data to some accounting system, ERP system, task manager, so

Nathan Latka

04:04What's your most popular integration there? Bill.com, QuickBooks, something else?

Serge Gusev

04:09>> Yeah. Let's say QuickBooks, Xero, also Jira for some IT departments to working with. But yeah.

Nathan Latka

04:15Oh, 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

04:39your 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

05:03get 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

05:25not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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

05:50going 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. Alright. We're gonna go back to the YouTube video here in a second, but if

06:13you 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 the

06:39interview. So guys, way to think about this basically is expense management inside of Slack and a really nice sort of UI. Serge, would you agree?

Serge Gusev

06:47>> Yep. There's also a couple of more use cases to add to it. It's actually because we're really serious about the compliance and actually approve it versus a system of records for organizations. And now we see that a lot of companies, they like adopt and first approve it for some finance related use cases. But then as more departments gets involved into those approval processes, they also like very interested to add more use cases on top of it,

Pricing and ARPU

Serge Gusev

07:09>> such as access provisioning, what else, like payrolls, there's like candidate approvals. So there's a lot of use cases that we have around the

07:20>> organizations. But yeah,

Nathan Latka

07:21And we'll see for all these use cases, sort of sum this up for me, what are customers paying you per month on average to use the technology?

Serge Gusev

07:28>> Yeah. I would say somewhere between thousand to $5,000 per year.

Nathan Latka

07:33Okay. A thousand to 5 so you you mean you're talking something like $300 per month on average, something like that?

Serge Gusev

07:38>> Yep.

07:39>> Yep. Yep.

Nathan Latka

07:40Okay. And what do you price off of? Is it number of seats, number of automation, something else?

Serge Gusev

07:45>> It depends on the team size, but yeah, for like the bigger teams, teams of more than 50 employees, which are up by number of seats. And for smaller teams, we have tiers of, like, how much approval request you can make per month. That's like $99 tier for 100 requests per month and $199 for 250 requests per month.

Company Timeline and Founding

Nathan Latka

08:02And then put this on a timeline for me. When did launch the business? When did you write the first line of code?

Serge Gusev

08:06>> I would say, yes. Like a year and seven or eight months at this point.

Nathan Latka

08:12Yep. Alright. So late twenty twenty one, something like that?

Serge Gusev

08:15>> Yep. Yep. Exactly.

Nathan Latka

08:17And then how many customers are you let's fast forward today. How many customers are you working with?

Customer Count and Free vs Paid Mix

Serge Gusev

08:21>> Yeah. So far, it's a couple of 100 customers. So yeah.

Nathan Latka

08:25You have 700 on your website. Are those are those all the paying customers or some of them free?

Serge Gusev

08:30>> Some of them free. Some of them paying. But, yeah, I would say the conversion is quite high right now, and we're working to get more paying customers.

Nathan Latka

08:37Okay. So something like 300 paying customers out of the 700, something like that.

08:41>> Yep.

08:41Okay. Very cool. Now you mentioned when the product launch happened, funding also followed. So I assume that means you're not bootstrapped.

Serge Gusev

08:49>> Yep. Yep. Yep. We just raised the pre seed round. So we're also fundraising right now. So yeah.

Nathan Latka

08:55Okay. The pre seed round you closed last year?

Serge Gusev

08:58>> Yes.

Nathan Latka

09:00How much did you decide did you decide to raise?

Serge Gusev

09:03>> 170 k at that point.

Nathan Latka

09:05Okay. And was that on a convertible note?

Serge Gusev

09:07>> Yeah. It's like a safe note.

Nathan Latka

09:09Okay. Most safe was it capped or uncapped? Do you remember?

Serge Gusev

09:13>> It was, like, post monetization cap. Yeah.

Nathan Latka

09:17Okay. Post money. I mean, most folks closing pre seeds early last year before the market started to tank were closing on, like, 5,000,000 caps, something like that. Is that what you closed on?

Serge Gusev

09:26>> Pretty close. Yes.

Nathan Latka

09:28Okay. Fair enough. Maybe something a little under that?

Serge Gusev

09:32>> Yes. Maybe. Alright. I can say that, but, yeah, it's actually like we're raising another ramp right now. So, yeah, the valuation is way higher. So yeah.

Nathan Latka

09:41Why

09:42do you need a bunch of money to build this tool? It doesn't feel capital intensive to me.

Serge Gusev

09:48>> Yeah. It's actually more about the distribution and actually, it's like getting the word out there. So we invest a lot of in the content and in the education of our users. So, like, prospects, how they can use the breakthrough automation to make their processes more efficient. Right?

Nathan Latka

10:03Mhmm. Well, I mean, but you can only throw so money at content creation. I mean, do you guys have a clear channel? You know, you can take $5,000,000 and spend it to get more users?

Serge Gusev

10:13>> Yeah. Yeah. Sure. So we actually, like, we've written a lot, like, on the go to market strategy, just trying to, like, figure out what works for us best. So so far we have, like, defined some channels that can bring the desired results. Like, end goal is to build a billion dollar company. So yeah.

Nathan Latka

10:30So what's working right now? I mean, how'd you go from nothing to 700 customers or or users?

Serge Gusev

10:36>> Yeah. I would say the most like, the first channels was the product hunt, also search engines, just people looking for solutions like ours. Then we added some marketplace

Nathan Latka

10:46Well, what specifically on the search engine, though? I mean, there's there's a lot of nuance there. What keyword is is your top keyword?

Serge Gusev

10:51>> Yes. Like, Slack approvals, like, Microsoft Teams approvals, finance approvals, invoice automation, some something like that. Yeah.

Nathan Latka

11:00Uh-huh. Okay. Into I mean, you know, when I search Slack approvals, get, like, wrangle.io as the first result. I see YouTube stuff, and then I see approveit on the first page above the Salesforce ranking. You're talk that's what you're talking about. Right?

Serge Gusev

11:13>> Yes. Exactly.

Nathan Latka

11:14I see. Okay. So so you would say SEO and search is your top channel or your second to top channel?

Serge Gusev

11:23>> Sorry. Say again. Sorry?

Nathan Latka

11:25Would you say search is your top channel? That's where you get most of your customers?

Serge Gusev

11:28>> Yeah. So search is quite significant amount of like yeah. Quite quite important channel for us, but also marketplaces. So listen to that. We already listed on Slack marketplace. We also got listed on Jira marketplace. Listen, they added QuickBooks and Jira marketplace. We get some organic audience from there. And actually, as we ask in our past existing users to write us reviews on those channels. Right? So we're also getting some, yeah, just organic reviews from and also

11:58>> we can utilize our paid channels to convert into those reviews.

Nathan Latka

12:01Which marketplace drives you the most sign ups? I imagine it would be the Slack marketplace. Right?

Serge Gusev

12:07>> Yep. At this point, yes.

Nathan Latka

12:08You're right. Yeah. Yeah. And, like, I I'm looking at your listing right now on the Slack marketplace. I don't they don't allow do they not allow for reviews yet?

Serge Gusev

12:16>> Yeah. Not yet.

Nathan Latka

12:17Interesting. So how do you how do you make sure that your Slack listing in the app directory ranks high if there's no review system?

Serge Gusev

12:27>> Yep. So actually, there is a few ways to optimize for that. First, just use keywords in your listing. So like just people looking for something, they want to just that also helps you rank in and just helps people to find the right solution for their needs when they're looking for something. And also, yeah, just building a great product that would be featured in Slack. So if like the the admins of the marketplace like a product, they

12:51>> will be happy to feature you. So it's also helps.

Nathan Latka

12:54What category do I see categories, analytics, communication, etcetera. What category are you under?

Serge Gusev

12:59>> Yeah. Let's say, like, it it should be finance right right now, but also we're being in productivity. So

Nathan Latka

13:04Oh, I see. Yeah. Finance. Got it. Yeah. And I can sort by I can sort by popularity, which I guess is, like, number of installs. I see Zoho Books, Team Pay, and you guys are on this list further down. That's what you're that's what you're referring to. Right?

Serge Gusev

13:17>> Mhmm.

Nathan Latka

13:18Yeah. Yeah. Interesting. Okay. Very cool. So so marketplace so search engines, marketplaces, what else?

Serge Gusev

13:25>> Yeah. Also, like paid search, something we recently started working with, and this seems like it works for us quite well. And, yeah, just engaging with the existing communities, it actually helps a lot.

13:38Mhmm.

13:38>> We just yeah. We're just getting out there, spreading the word about approveit. Also, like, investments and education of the end users, and that works quite well for us.

Nathan Latka

13:46And share us a little bit about sort of your team today. How many folks are on the team full time?

Serge Gusev

13:51>> Yeah. So far, it's seven people and also, like, two folks helping us part time. So yeah.

Nathan Latka

13:56Okay. So seven. And how many I think you guys have a bunch of founders. Right? How many co founders are there?

Serge Gusev

14:00>> Actually, two.

Fundraising: Pre-Seed and Current Round

Nathan Latka

14:01Yeah. Oh, just two of you. Okay. Okay. Two co founder. Were you guys nice at the start? You just split it fifty fifty?

Serge Gusev

14:08>> Yes. Something like that.

Nathan Latka

14:11That's awesome. Alright. So you start coding back in 2021, you split it fifty fifty, you're seven full time today, you raised a little bit of pre seed money, you mentioned you're trying to raise now. How much are you looking to raise?

Serge Gusev

14:20>> Yeah. We're raising a million right now.

Nathan Latka

14:22Okay. And why I mean, most people are saying, oh my gosh, now is a terrible time to raise. Why are you doing the opposite?

Serge Gusev

14:29>> Yeah. Because we believe in our product. We see the direction. We see the value. We see that the existing customers, they're willing to expand and use our product intensively.

Nathan Latka

14:37Well, Serge, I mean, just just just to reframe my question. It has nothing to do with your product. The macroeconomics right now. Lot of VC funds have no money to lend because LPs are not wiring dollars. Has nothing to do with your application. Right? How do you how do you break through some of those walls?

Growth Channels: SEO, Marketplaces, and Communities

Serge Gusev

14:52>> Yeah. So still, like, if the product is good, I truly believe that VCs are very happy to invest in it. It's just, you know, like this The filter is a bit like more, you know, like There's just more filtering happening on the market, but still the projects get funded, especially in early stages.

Nathan Latka

15:09Is there something specific about your unit economics or your conversion rates where you go, man, we're world class. We think we can still get funding right now?

Serge Gusev

15:16>> Yeah. For sure. Again, go go go to market strategy and just, like, the way we can efficiently allocate the resources, I think it's the most important part.

Nathan Latka

15:24Mhmm. Okay. And you mentioned earlier 300 customers. You mentioned an average, you know, an ARPU of, call it, $300 to $400 bucks a month. That would put you right around $90,000 a month right now in revenue or something like that. Is that generally accurate?

Serge Gusev

15:37>> Not sure. I have to double check that.

15:40Oh, Serge, come on.

15:40>> What do you mean?

Nathan Latka

15:41You're raising money right now. We're talking about economics and you don't know what your revenue is. I don't believe you.

Serge Gusev

15:45>> Oh, that's something just I can't disclose. Yeah. But

Nathan Latka

15:49But I'm just multiplying your numbers. Right? 300 customers times $300 a month, you're somewhere around $90,000 a month in revenue. Right?

Serge Gusev

15:57>> Maybe. I can't say that, unfortunately.

Nathan Latka

16:00But which of those numbers I mean, one of those number it's a multiplication question. So either the customer count you gave me is wrong or the ARPU is wrong.

Serge Gusev

16:07>> Yeah. I would say, like, the customers could be a different figure, but I I can't say the exact figure at this point, unfortunately. They have to still

Nathan Latka

16:15We know 700. Right? I mean, we know 700 are total users, and you said some portion of those are paid. You said, quote, around minute five of this interview, quote, we have a very high conversion rate. I would consider free to pay to average conversion rate is 5%. So high would be, you know, 10%. So maybe you have less customers, but you still have nice growth.

Revenue Growth Rate

Serge Gusev

16:35>> Yes. That's true. That's true.

Nathan Latka

16:36Do you think you can break a $100,000 a month in revenue this year sometime?

Serge Gusev

16:40>> Yes. Definitely.

Nathan Latka

16:42Okay. There you go. With even without raising or you would need the money from the raise to grow that fast?

Serge Gusev

16:47>> Yes. We still need to raise the money, but I would say that we quite on a on a great path, like, in a in a great space without the money as well. So

Famous Five: Books, Tools, and Personal Background

Nathan Latka

16:55And when you look at your revenue growth last twelve months without actually sharing the revenue percentage wise, are we talking like 100% year over year growth, 200% year over year growth? Where are you at?

Serge Gusev

17:05>> Yes. I would say yeah. We we we grow four times. Like, it's 400%.

Nathan Latka

17:09Four four x. Okay. So that'd be about 300 percent year over year growth or four x year over year growth.

Serge Gusev

17:14>> Yep.

Nathan Latka

17:15Alright, Serge. Very good. Let's wrap up here with the famous five. Number one, what's your favorite business book?

Serge Gusev

17:20>> I would say, yeah, Zero to One.

Nathan Latka

17:24Number two, is there a CEO you're following or studying?

Serge Gusev

17:29>> Elon Musk, I guess.

Nathan Latka

17:31Number three, what's your favorite online tool for building approveit?

Serge Gusev

17:36>> Say again? Sorry?

Nathan Latka

17:37Your favorite online tool?

Serge Gusev

17:40>> I would say Jira.

Nathan Latka

17:41Jira. Yeah. That's a good one. Number four. How many hours of sleep do you get every night?

Serge Gusev

17:47>> I would say six.

Nathan Latka

17:48Okay. And what's your situation? Married? Single? Kids?

Serge Gusev

17:52>> Nothing.

Nathan Latka

17:53Not single?

17:54>> Not married.

17:54Any kids?

Serge Gusev

17:55>> Yep. Not yet.

Nathan Latka

17:57Okay. And how old are you, Serge?

Serge Gusev

17:59>> I'm 28.

Nathan Latka

18:0128.

18:02Last question. What's something you wish you knew eight years ago when you were 20?

Serge Gusev

18:07>> I would say that's an interesting question, actually. I don't know. Just, like, work more and, like, eventually, you will get the result. Right?

Nathan Latka

18:18Approveit. Today, guys. They are effectively expense management inside of Slack. They launched on Product Hunt in 2021. 500 upvotes got their first paying customers. Today, they've got over 700 users on the platform. A couple 100 of them are paying somewhere between, call it, $200 to $400 bucks a month in revenue. He does feel like they can break a $100,000 a month in revenue this year if they are able to close this $1,000,000 round of funding they're looking for.

18:40They closed a 170,000 pre seed round last year at, call it, somewhere between a 3 and $5,000,000 cap that was on a safe note. Got two cofounders, team of seven today, and then another two that are part time as they look to continue to build, again, not just expense management inside of Slack, but also expanding to other marketplaces and also expanding to other use cases. Serge, thanks for taking us to the top.

Serge Gusev

19:02>> Thank you.

Nathan Latka

19:03One 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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