How Billbee CEO David Pohlmann grew to $7.7M revenue and 20K customers in 2023.

hey folks my guest today is david pullman he is building bill b order and inventory management for multi-channel e-commerce companies david you ready to take us to the top yes i am thank you all right you're in a very hot space how are you sort of defining your niche and trying to monopolize yeah um actually i think at the moment or especially in the last couple of months during covert and so on and this this space and this niche has yeah a lot of momentum i think and especially in europe with some yeah bigger acquisitions and bigger um venture capital investments name a couple of those just so everyone has contact um yeah when i ever mind central um which is a yeah a german yeah erp system would say for for all the inventory of e-commerce and um sequoia joint or yeah went into them last year and this was kind of a big announcement for the european and especially german tech scene i think and yeah this is kind of the space where we are in and um yeah especially with all the marketplaces coming up and with shopify and uh different cloud job systems coming up um yeah seems to be a very interesting space though however i think we got the niche that we focus very small and medium-sized um businesses and try to target the flop 90 would say and not the top 10 so yeah that's what we do and when you came on back in december last year i love that you were bootstrapped you said that you had you know over 9 000 customers which is a big number they're paying on average 10 million 15 to 20 per month right so i think you were around a two or two and a half million dollar run rate right yeah that was back in december i think the numbers were from september or so yeah and so today how many customers are you working with um we are at around 12k customers that's great so how did you get an additional 3 000 customers over the past six months um we have a very high sign up rate it's around yeah 1.5 to 2k a month and we somehow managed to turn at least 25 to 30 of them into paying customers and churn is comparably low so yeah that's why break that down for me so last month between 1500 and 2000 new signups at your platform what do they have to do like what's the funnel look like and we do not have any direct sales so they really come to bilby through word of mouth marketing and through partners so we are listed in the shopify app store and marketplaces app stores and partner pages so this is our main traffic source and especially the e-commerce community is very big and very connected in germany so everyone yeah yeah talks to each other and gives the names of tools they like and yeah that's that's how we get the most sign ups i think and we have a very high conversion rate from from visitor to to sign up and also very high rate as i said from from uh trial to paid so um yeah that's that's the way it works at the moment you have 47 you have 47 reviews on shopify and average rating about 3.6 um how many new leads each month do you guys get from shopify would you say i would say it's maybe 15 percent of the total okay so 200 or 300 signups a month yeah from billb round about exactly yeah and so then 25 of those 20 to 40 new customers from shopify each month something like that yeah but the majority so really the biggest part is um organic seo and organic what of most traffic yeah okay the organic seo terms what sort of terms have you been optimizing for typical german buzzwords so german terms for for inventory management order management invoicing e-commerce invoicing invoice creation bill creation all this kind of stuff and do you require a credit card on the trial or no no it's email and password only okay and what do you know you had to have to do during the trial period to get them to get work to paid at the end how long is that trial period drug period is 30 days um and but but i think the majority who is um or yeah who's able to work with bilby and is productive will be within the first five days this is the the most interesting group so we've we've always thought to cut the trial to ten or five days or so and i think this might be enough because if you haven't get the benefit you've done that you've actually done i don't know no we haven't we're thinking about it and maybe doing it in the yeah in the near future because i think if you if you're not used to bulby within the first yeah five days or so you won't probably get used to it in the first 30 days so that's a good i mean that's i think that's an astute observation now what do you know people have to do during the trial to drastically increase the likelihood they can work to paid at the end of the trial is it a javascript in bed is it number of product sales what is it um i think it once they connect the marketplace or shop wherever they sell the ecommerce stuff i think once they connect this this is a trigger point so if the orders flow into bobby and they see how easy it works how easy they they can create invoices how easy they can create shipping levels and so on so i really think the trigger point is connecting any third-party application to bobby being in the marketplace being an e-commerce store so yeah and have you started really developing additional products to upsell your 12 000 customers or is your rpu still about 17 bucks of a customer um actually we have um simplified pricing however we have increased our put through this so we are at around 32 at the moment yeah that's a that's that's almost that's almost doubled over the past seven months how did you do that um on the one hand the customers were growing through maybe covet and and christmas and holiday season and so but also we haven't yet dramatic shift of our pricing strategy so beforehand we had different modules so you could have a very few modules and you could have more modules and you could have premium support and so on and now we have completely simplified this so we have only one pay-per-use pricing which is 100 based on the number of orders you have and this ranges from one euro with uh zero orders to 499 euro with yeah unlimited orders let's say it's logarithmic so uh if you have fewer orders you pay more per order and if you have a lot of orders you pay less product and so with all that strategy and the change you've implemented what was monthly recurring revenue last month we had um in june 385k that is so impressive i mean the amount that you've added since just december is i mean that's how you've almost added i mean you always had a 200 000 a new mrr 2.4 million new ar run rate in about nine months are you still bootstrapped yes we are i mean i imagine you're getting all kinds of inbound what's the highest valuation of bc is thrown in front of you actually we haven't seen any number for this so far and um to be honest tomorrow i have a first call where we yeah maybe here a number for it a valuation for it but we haven't really to be honest we haven't yet any numbers so far so what would you do what's a range that you would set i mean what do you think it's worth on the high end i don't know i i mean we are very profitable so we had in 2020 we have an ebitda of around 700k and at the moment we are at yeah at least 100 to 150k per month ebit so um yeah to be honest i think if you if you find the right seller it might be something between 30 or the 30s range also but um yeah at the moment there are no specific plans to to sell or to do so but yeah let's see i hope you don't understand yourself 30 million to me seems actually very conservative considering how profitable you are and how fast you're growing i bet you if you run a true process you probably end up closer to between like 40 and 60. but that's if you want to go to the vc route you're killing it we're not going that route right i mean you remind me a lot of of jan and uh and chipmunk and how he grew and did secondaries are you the only founder or co-founders um actually i'm the first employee so we'll be single founded by our by by the founder jan and and cto and yeah i was a first employee and at the the revenue part and ops part so and you have some equity at least bso okay so you have some upside yeah yeah very cool what's the team size today how many people um we are 30 30. how many engineers um and what's churn look like um it's less than one percent per month right we had a little more uh churn when we when we had the pricing switch but um yeah it's three months a month ago and now we're at uh below one percent again and your expansion revenues increase drastically because of your arpu expansion right yes it is so yeah i don't know i'm haven't have the actual number but yeah it's it's huge of course this is very exciting david let's wrap up the famous five number one favorite book i'm still scaling up you're consistent i like that number two is there a ceo you're following or studying yes there's still a guillaume from from lemlist still you know uh number three what's your favorite online tool for building a business um to be honest still finding out so we are at your moment looking at asena and click up for a yeah for a for a project management tool here number four how many hours of sleep do you get every night um eight would say and what's your situation uh it's still still uh uh hopefully still married with a kiddo um yes two no two kids now okay that's exciting you have to congratulations the new one thank you are you still 29 david are you 30. i'm 30. 30 years old last question something you wishing you were you're 20 um maybe more about personal finances guys very hot space bilby you wouldn't believe how fast the growing bootstrap they're doing about 180 000 a month just nine or ten months ago they're now doing 380 000 per month in revenue so from a two million to a four and a half million dollar run rate and under call it eight months obviously a lot of people want to invest they've said no because they're profitable they take 150 grand to the bottom line every single month so very profitable team of 30 people valuation i think is much north you know north of 30 million but we'll see what happens there they've got calls coming up churn and retention continues to get better as customers pay them more and more for additional products david thanks for taking us to the top thank you nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to 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 sas world whether it's an 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 sas 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 are saying sign up for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 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 all right i'll be in the comments see ya

Introduction hello everyone my guest today is david pullman he's always making money online all the way back since school he started his professional career as a cooperative student at former 120 000 person hp with stops in europe and california later on he started as employee number one and took over the growth part to further bootstrap bilby to a seven and more figure sas company now working as the md for revenue and operations david you ready to take us to the top yes i am thank you all right so just to be clear you're working full-time at bilby.io as md do you have equity in the company are you considered a co-founder um we have uh vso sorry so um i've watched the stock options so no no equity but um yeah it's only virtual yeah okay great that's helpful to understand so tell us about the company what's the company do and are you pure play sas how do you make how do you guys make money yeah we are actually pure ask we're a typical b2b sas application for small and micro businesses who sell their stuff online so we are in the field of e-commerce and um lots of our users um yeah just selling amazon ebay shopify and all this kind of stuff and we do all the back-end processes like invoicing shipping um yeah inventory yeah stock levels thinking and all this kind of stuff so we we see ourselves as some kind of toolkit for multi-channel e-commerce would say when did the company launch uh we started in 2015 okay and now today on average what are these small businesses paying you to use your technology um we have a rpool of like 17 a month okay and the the bandwidth is very high from starting from zero a few cents until yeah a couple of hundred euros and okay so yeah big bandwidth but average is 17 per month take it back to 2015 though how did you guys get your first hundred customers [Music] um we've been in a very niche market and there's a platform called davanda which is the german clone of etsy and and we started especially in the diy area for e-commerce and there was a big community and we really started off with the diy community and there was only one tool to generate invoices and uh this was buildi at this time and so it was really easy to to get the first 100 customers in there yeah very very niche and how many how many customers now today Currently serving 9000 customers um we have a little more than 9 000 paying customers okay and and yeah what's enabling i mean when you say that they're processing things like payments through you as well is there a percent of gmv model as well or it's just pure sas um yeah actually there's not a percentage of gmb volume but we have a transaction based pricing so they pay us seven cents per order which goes through the system in in basic terms let's say and there are a few modules around it which which yeah which lead to some upselling yeah but basically it's seven cent per order why did you choose to go that route instead of just charging a percent of of total sales that they put through platform yeah that's that's a good question i think it's some kind of historical how we how we decided to go with the orders and um yeah also even if you sell very high cost product it doesn't mean you have a high margin and and vice versa so you could sell something for 2 euro and have 1.5 euro margin and and the other way around so yeah that's why i think we've Monthly recurring revenue decided to go with a per order pricing instead of a percentage pricing interesting so 9 000 customers 17 per month how much are you doing per month in revenue um we do uh 180k and if that's what you're doing today what were you doing exactly one year ago uh in that's this was this september exactly and um september before it was let me just check it out i have the numbers here i think um yeah probably we've grown by by 70 so um yeah so you're doing about a hundred thousand dollars a month a year ago exactly what around a hundred thousand little less than a hundred thousand k yeah yeah yeah very good great growth where and talk to me have you guys Bootstrapped bootstrapped this or did you guys raise capital i know it's completely bootstrapped yeah no love no funding no no yeah no it does that that's great are you guys profitable today are you or are you break even um we're profitable we are 25 to 30k per month so yeah that's great so you throw away we always we always trade try to stick to the rule of 40 but also have both both kpis above 10 so we do not fall want to fall below 10 percent profit yep and rule of 40 takes basically your profit plus your growth and what you're saying is you want to be above 10 both on year and year overall growth and you're well north of that you're at 70 and you want your profitability every to also be above 10 exactly yeah that's great um tell me more about the team how many folks on the team today um we're 20 yeah how many engineers eight around 18 and any quota carrying sales reps or no um no we do not do any sales at all yeah yep yep and walk you know churn is critical in a sas company especially selling to smbs what's your churn look like um annual churn is like 13 so gross churn um but we have a lot of expansion so net revenue retention is actually above 100 it's around 101 102 or so got it so you turn 13 percent you expand by 14 to 15 net revenue retention 102 exactly yeah and you start off in these niche sort of etsy the german competitor etsy sort of sites the diy space how are you getting customers today um yeah it's really a lot of one of most we're we're focusing on the german speaker region as of now so we're quite yeah quite known within german-speaking region which in the e-commerce area would say um but also we get all our yeah referrals which are not word of mouth referrals from our partners which are um the e-commerce systems like shopify woocommerce uh yeah magento amazon ebay all these all these players have their own app stores or plugin stores or or partner sites where we integrate with and that's the yeah by far the biggest source of new leads and new signups you're integrating around you're in the room good we are at around a thousand signups a month and yeah more than a half of it is really referred by by our partners 1000 free signups or new paid customers free free signups how many convert to paid each year each month uh 25 to 235 so one third roundabout i got it so you're getting between 200 and 300 new customers per month yes exactly um interesting of all the app stores you're uh integrated with which one drives you the most new referrals per month what do you guess i would guess shopify yeah by far yeah okay interesting um any talks to to uh for shopify to acquire you guys not yet and but we actually don't want to so why is that we are fine i think why is that yeah at the moment we really feel that the freedom of being bootstrapped and having a profitable company which yeah really produces some some cash and yeah just makes fun to work with and yeah we this year we introduced um remote remote first so we are cancelled all offices we also introduced 30-hour full-time work week while keeping pay so yeah few things you probably could do with some some capital behind you so what are you spending i get a lot of Customer acquisition cost your stuff as from referral partners but when you do spend money what is your fully weighted cac to get a new 17 a month customer yeah it's difficult to count because the only cost we really can associate with it is commissions and yeah maybe some some ads budget but we do very few performance marketing and um so keck is probably a few hundred few hundred bucks maybe 150 to 180 bucks or so interesting what is the ca when you say commission you may you mean the commission you paid a shopify to their app exchange for example yeah exactly yeah which is how much uh with shopify it's 25 percent got it got it very good all right this is good stuff let's wrap them here with the famous five number one favorite business book um scaling up by bernhard number two david is there a ceo you're following or studying right now um maybe the guy from lambeth julion jillian can't spell his name to be honest from where from from lemlist from one from lemless yeah guillaume yeah yeah number two uh is there a uh what's your favorite online tool for building your company um leap sum say it again leap sum l-e-a-p sum yeah number four some kind of employee employee engagement or so yeah how many hours you sleep to get every night seven to eight and what's your situation married single kids um married one kid okay and how old are you um i'm 29 so 29 last question what's something you wishing when you were 20. with the job earlier guys there you have it bilby.io started selling early on to di wires in the german competitor shopify sort of app exchange this was back in uh you know a couple years ago 2015 they launched they were doing about 1.2 million in terms of run rate a year ago now doing 2.2 million in terms of run rate they've got over 9 000 customers paying average seventeen dollars per month they're profitable every month they take about twenty to twenty five thousand dollars to the bottom line also growing nicely and they're doing all this completely bootstrapped which we love team of twenty people eight engineers churn is thirteen percent expansion 15 402 net revenue retention payback period super healthy as they look to continue to scale david thanks for taking us to the top thank you have a good one nathan bye one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to 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 sas world whether it's an 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 sas 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 are saying sign up for that at nathan laca dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 to counter those people we gotta push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya