Billbee Interview
How Billbee Reached 12,000 Customers and $32 ARPU While Staying Bootstrapped (Interview with David Pohlmann)
- Interview Date
- July 28, 2021
- Interviewee
- David PohlmannFirst Employee (Revenue and Operations)
Company Metrics at Interview Time
Customers (2021)
12,000
ARPU (2021)
$32 per month
Gross Churn (2021)
Less than 1% per month
EBIT (2021)
At least €100K per month
Team Size (2021)
30
Historical Snapshot
These numbers were reported by David Pohlmann during the interview recorded in July 2021 and are a historical snapshot, not current figures. See Billbee’s current numbers.
Key Takeaways
- 01Billbee had around 12,000 paying customers as of mid-2021
- 02ARPU rose to around $32 per month after Billbee simplified its pricing
- 03Gross churn was below 1% per month after recovering from a brief spike during the pricing transition
- 04EBIT ran at least 100,000 euros a month in 2021, and EBITDA was 700,000 euros for full-year 2020
- 05The company was fully bootstrapped, with no outside investment
- 06Billbee was taking 1,500 to 2,000 sign-ups a month, with 25 to 30% of them converting to paid
- 07The team had 30 people total, including 10 engineers
- 08Organic SEO and app marketplace listings (including Shopify) were the primary growth channels
- 09Billbee simplified its pricing to a single pay-per-use model based on order volume, ranging from 1 euro to 499 euros per month
- 10The company was founded by a single founder, Jan, with David Pohlmann joining as the first employee handling revenue and operations
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2021) | 12,000 | Interview with David Pohlmann, July 2021 |
| ARPU (2021) | $32 per month | Interview with David Pohlmann, July 2021 |
| Trial-to-Paid Conversion Rate (2021) | 25% to 30% | Interview with David Pohlmann, July 2021 |
| Gross Churn (2021) | Less than 1% per month | Interview with David Pohlmann, July 2021 |
| EBITDA (Full Year) (2020) | €700K | Interview with David Pohlmann, July 2021 |
| EBIT (2021) | At least €100K per month | Interview with David Pohlmann, July 2021 |
| Team Size (2021) | 30 | Interview with David Pohlmann, July 2021 |
| Engineers (2021) | 10 | Interview with David Pohlmann, July 2021 |
| Monthly Sign-Up Rate (2021) | 1,500 to 2,000 | Interview with David Pohlmann, July 2021 |
| Shopify Share of Sign-Ups (2021) | 15% of total | Interview with David Pohlmann, July 2021 |
| Pricing Range (2021) | €1 to €499 per month | Interview with David Pohlmann, July 2021 |
Growth Breakdown
Customers
Customers: Billbee reached around 12,000 paying customers by mid-2021 — "We are at around 12 k customers." It was taking 1,500 to 2,000 new sign-ups a month and converting 25 to 30% of those into paying customers, with gross churn below 1% per month.
Revenue and ARPU
Revenue and ARPU: ARPU rose to around $32 per month after Billbee replaced its modular pricing with a single pay-per-use plan tied entirely to order volume — "we have increased ARPU through this, so we are at around $32 at the moment." David credited both the new pricing and customer growth through COVID and the Christmas and holiday season.
Profitability and Funding
Profitability and Funding: Billbee remained fully bootstrapped throughout its growth. The company generated EBITDA of approximately 700,000 euros in 2020 and at least 100,000 euros a month in EBIT by mid-2021. David said no investor had put a number on the company yet, and that his first such call was scheduled for the day after the interview.
Team
Team: The team grew to 30 people by mid-2021, including 10 engineers. Billbee was founded by a single founder, Jan, and David Pohlmann joined as the first employee, leading revenue and operations.
Growth Strategy
Organic SEO in German
The largest source of new sign-ups was organic search traffic. Billbee optimized for German-language terms related to inventory management, order management, invoicing, and e-commerce billing, targeting the dense German-speaking e-commerce community.
App Marketplace Listings
Billbee was listed in the Shopify app store and other marketplace app stores, which David estimated accounted for around 15% of total monthly sign-ups. These listings provided a steady inbound channel without requiring direct sales.
Word-of-Mouth in the E-Commerce Community
David credited the tight-knit nature of the German e-commerce community as a major growth driver. Merchants regularly recommended tools to each other, and Billbee benefited from strong organic referrals within that network.
Pricing Simplification to Drive ARPU
Pricing Simplification to Drive ARPU: Billbee replaced a modular pricing structure with a single pay-per-use model based entirely on order volume, ranging from 1 euro to 499 euros per month on a logarithmic curve, so sellers with more orders paid less per order. After the switch David put ARPU at around $32 per month.
High-Intent Trial Conversion Focus
The trial period was 30 days, but David observed that users who became productive within the first five days were the most likely to convert. The key activation trigger was connecting a third-party marketplace or shop so that orders began flowing into Billbee automatically.
Best Quotes
“We have a very high sign up rate. It's around 1.5 to two k 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.”
“We do not have any direct sales, so they really come to Billbee 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 talks to each other and gives the names of tools they like, and that's how we get the most sign ups, I think.”
“The majority, though, really the biggest part is organic SEO and organic word-of-mouth traffic.”
“Actually, we have somewhat simplified pricing. However, we have increased ARPU through this, so we are at around $32 at the moment.”
“We are very profitable. So we had in 2020, we have an EBITDA of around 700 k. And at the moment, we are at at least 100 to 150 k per month EBIT.”
“Actually, I'm the first employee. So Billbee is single founded by our by by the founder, Jan, and and CTO. And, yeah, I'm I was the first employee and did the the revenue part and ops part.”
“We had a little more churn when we when we had the pricing switch, but, yeah, it's three months ago, and now we're at below 1% again.”
What Happened Next
This interview captured Billbee in July 2021, about three months after it replaced its modular pricing with a single pay-per-use plan, with around 12,000 customers, $32 ARPU and no outside investment. David Pohlmann said no investor had given the company a valuation number at that point, and that his first such call was scheduled for the following day. The figures here reflect what he reported during the conversation and are a point-in-time snapshot. Visit the Billbee company profile on GetLatka for current metrics and any updates since this recording.
View Billbee’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Market Context
- 1:44Customer Count Reaches 12,000
- 1:56Monthly Sign-Up Rate and Trial Conversion
- 2:21Growth Channels: Word-of-Mouth and App Stores
- 3:30Organic SEO as Primary Traffic Driver
- 4:08Trial Period and Activation Trigger
- 5:24Pricing Simplification and ARPU Growth
- 5:49Pay-Per-Use Pricing Model Explained
- 6:34MRR and Bootstrapped Status
- 6:59Investor Inbound and Valuation Discussion
- 7:31Profitability: EBITDA 2020 and Monthly EBIT
- 8:25Billbee's Founder and David's Role as First Employee
- 8:43Team Size and Churn
- 9:20Famous Five Rapid-Fire Questions
Introduction and Market Context
Nathan Latka
00:00Hey, folks. My guest today is David Pohlmann. He is building Billbee, order and inventory management for multichannel ecommerce companies. David, are ready to take us to the top?
David Pohlmann
00:08>> Yes, I am. Thank you.
Nathan Latka
00:10Alright. You are in a very hot space. How are you sort of defining your niche and trying to monopolize?
00:16Yeah.
David Pohlmann
00:18>> Actually, think at the moment, especially in the last couple of months during COVID and so on, this space and this niche has gained a lot of momentum, I think, and especially in in Europe with some, yeah, bigger acquisitions and bigger venture capital investments.
Nathan Latka
00:34Name name a couple of those just so everyone has contact.
David Pohlmann
00:37>> Yeah. One I have in mind is Xentral, which is a, yeah, a German ERP system, I would say, for order inventory of eCommerce, and Sequoia joined or
00:51>> 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, especially with all the marketplaces coming up and with Shopify and different cloud shop systems coming up. Yeah, Seems to be a very interesting space, though. However, I think we got the niche that we focus very small and medium sized businesses and try
01:18>> to target the flop 90%, I would say, and not the top 10%. So, yeah, that's what we do.
Nathan Latka
01:24When you came on back in December last year, I love that you were bootstrapped. You said that you had over 9,000 customers, which is a big number. They're paying on average $15 to $20 per month, right? So I think you were around a 2,000,000 or $2,500,000 run rate, right?
David Pohlmann
01:39>> Yeah. That was back in December. I think the numbers were from September or so. Yeah.
Customer Count Reaches 12,000
Nathan Latka
01:44And so today, how many customers are you working with?
David Pohlmann
01:47>> We are at around 12 k customers.
Nathan Latka
01:50That's great. So how did you get an additional 3,000 customers over the past six months?
Monthly Sign-Up Rate and Trial Conversion
David Pohlmann
01:56>> We have a very high sign up rate. It's around 1.5 to two k 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.
Nathan Latka
02:13Break that down for me. So last month, between 1,500 and 2,000 new sign ups at your platform, what do they have to do? Like, what's the funnel look like?
Growth Channels: Word-of-Mouth and App Stores
David Pohlmann
02:21>> We do not have any direct sales, so they really come to Billbee 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
02:43>> talks to each other and gives the names of tools they like, and 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 trial to paid. So, yeah, that's that's the way it works at the moment.
Nathan Latka
03:05Have 47 you have 47 reviews on Shopify and an average rating of about 3.6. How many new leads each month do you guys get from Shopify, you say?
David Pohlmann
03:15>> I would say it's maybe 15% of the total.
Nathan Latka
03:20Okay. So 200 to 300 sign ups a month by trials from Billbee?
David Pohlmann
03:24>> Roundabout. Exactly. Yeah.
Nathan Latka
03:25And so then 25% of that is 20 to 40 new customers from Shopify each month, something like that.
Organic SEO as Primary Traffic Driver
David Pohlmann
03:30>> Yeah. Yeah. But the majority, though, really the biggest part is organic SEO and organic word-of-mouth traffic. Yeah.
Nathan Latka
03:38Okay. The organic SEO terms, what sort of terms have you been optimizing for?
David Pohlmann
03:42>> Typical German buzzwords, so German terms for for inventory management, order management, invoicing, e commerce invoicing, invoice creation, bill creation, all these kinds of stuff.
Nathan Latka
03:56Do you require a credit card on the trial or no?
David Pohlmann
03:59>> No. It's email and password only.
Nathan Latka
04:01Okay. And what do you know you're gonna have to do during the trial period to get them to convert to paid at the end? How long is that trial period?
Trial Period and Activation Trigger
David Pohlmann
04:08>> Trial period is thirty days, but I think the majority who is able to work with Billbee and is productive with Billbee within the first five days, this is the most interesting group. So 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
Nathan Latka
04:31You've done that, sorry, have you actually done that or no?
David Pohlmann
04:33>> No, we haven't. We're thinking about it and maybe doing it in the near future because I think if you're not used to Billbee within the first five days or so, you won't probably get used to it in the first thirty days.
Nathan Latka
04:47That's a good I mean, 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 convert to paid at the end of the trial? Is it a JavaScript embed? Is it a number of product sales? What is it?
David Pohlmann
04:59>> I think once they connect the marketplace or shop wherever they sell the e commerce stuff, I think once they connect this, this is the trigger point. If the orders flow into Billbee and they see how easy it works, how easy they can create invoices, how easy they can create shipping labels, and so on. So I really think the trigger point is connecting any third party application to Billbee, being at a marketplace, being at an e commerce
05:23>> store, so yes.
Pricing Simplification and ARPU Growth
Nathan Latka
05:24Have you started really developing additional products to upsell your 12,000 customers, or is your ARPU still about $17 per customer?
David Pohlmann
05:32>> Actually, we have somewhat simplified pricing. However, we have increased ARPU through this, so we are at around $32 at the moment.
Nathan Latka
05:41$32 ARPU?
David Pohlmann
05:42>> Yeah.
Nathan Latka
05:43That's almost doubled over the past seven months. How did you do that?
Pay-Per-Use Pricing Model Explained
David Pohlmann
05:49>> The one hand, the customers were growing through maybe COVID and Christmas and holiday season and so, but also we have a dramatic shift of our pricing strategy. So beforehand, we had different modules, so you could have 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
06:16>> orders you have. And this ranges from €1 with zero orders to €499 with unlimited orders, let's say. It's impressive. It's logarithmic. So if you have fewer orders, you pay more per order. And if you have a lot of orders, you pay less per order.
MRR and Bootstrapped Status
Nathan Latka
06:34And so with all that strategy and the change you've implemented, what was monthly recurring revenue last month?
David Pohlmann
06:40>> We had in June 385 k.
Nathan Latka
06:44That that is so impressive. I mean, amount that you've added since just December is an it is I mean, that's how you've almost added I mean, you almost added 200,000 in new MRR, 2,400,000 in new ARR run rate in '9 Are you still bootstrapped?
David Pohlmann
06:57>> Yes. We are.
Investor Inbound and Valuation Discussion
Nathan Latka
06:59I mean, I imagine you're getting all kinds of inbound. What's the highest valuation of VCS starting from you?
David Pohlmann
07:05>> Actually, we haven't seen any number for this so far. And to be honest, tomorrow I have a first call where we, yeah, maybe hear a number for it, a valuation for it, but we haven't really to be honest, we haven't yet any number so far. So
Nathan Latka
07:22What would you know in the business?
07:24What would you What's a range that you had set? I mean, what do you think it's worth on the high end?
Profitability: EBITDA 2020 and Monthly EBIT
David Pohlmann
07:31>> I don't know. I I mean, we are very profitable. So we had in 2020, we have an EBITDA of around 700 k. And at the moment, we are at at least 100 to 150 k per month EBIT.
07:47>> To be honest, I think if you find the right seller, it might be something between 30 or the 30 ish range or so. But, yeah, at the moment, there are no specific plans to to sell or to do so, but, yeah, let's see.
Nathan Latka
08:01I hope you don't undersell yourself. 30,000,000 to me seems actually very conservative considering how profitable you are and how fast you're growing. I bet if you run a true process, you probably end up closer to between, like, 40 and 60. But that's if you wanna go the VC route. You're killing it. We're not going that route. Right? I mean, you remind me a lot of Jan and ShipMonk and how he grew and did secondaries
08:20and took payouts. Are you the only founder or you have cofounders?
Billbee's Founder and David's Role as First Employee
David Pohlmann
08:25>> Actually, I'm the first employee. So Billbee is single founded by our by by the founder, Jan, and and CTO. And, yeah, I'm I was the first employee and did the the revenue part and ops part. So You
Nathan Latka
08:37have some equity at least?
David Pohlmann
08:40>> BSL.
Nathan Latka
08:41Okay. So you have some upside.
David Pohlmann
08:42>> Yeah. Yeah.
Team Size and Churn
Nathan Latka
08:43Very cool. And what's the team size today? How many people?
David Pohlmann
08:47>> We have 30.
Nathan Latka
08:4830. How many engineers?
David Pohlmann
08:51>> 10.
Nathan Latka
08:52And what's churn look like?
David Pohlmann
08:54>> It's less than 1% per month.
Nathan Latka
08:58And expansion is through the roof. Right?
David Pohlmann
09:00>> We we had a little more churn when we when we had the pricing switch, but, yeah, it's three months ago, and now we're at below 1% again.
Nathan Latka
09:09And your expansion revenues increased drastically because of your ARPU expansion, right?
David Pohlmann
09:13>> Yes, it is. So, yeah, I don't know. I haven't had the actual number, but, yeah, it's huge, of course.
Famous Five Rapid-Fire Questions
Nathan Latka
09:20This is very exciting, David. Let's wrap up with the famous five. Number one, favorite book.
David Pohlmann
09:25>> I'm still scaling up.
Nathan Latka
09:27You're consistent. I like that. Number two, is there a CEO you're following or studying?
David Pohlmann
09:30>> Yes. There's still Guillaume from from Lemlist.
09:34>> Still Guillaume.
Nathan Latka
09:35Number three, what's your favorite online tool for building a business?
David Pohlmann
09:39>> To be honest, still finding out. So we are, at your moment, looking at Asana and ClickUp for a yeah. For a for a project management tool here.
Nathan Latka
09:47Number four, how many hours of sleep do you get every night?
David Pohlmann
09:51>> Eight, I would say.
Nathan Latka
09:53And what's your situation? Still still hopefully, still married with a kiddo?
David Pohlmann
09:58>> Yes. Two now.
Nathan Latka
09:59Two kids now. Oh, that's exciting. Congratulations on the new one.
David Pohlmann
10:05>> Thank you.
Nathan Latka
10:06Are you still 29, David, are you 30?
David Pohlmann
10:09>> I'm 30.
10:09>> Yeah. 30 years old.
Nathan Latka
10:10Last question. Something you wish you knew when you were 20.
David Pohlmann
10:15>> Maybe more about personal finances.
Nathan Latka
10:18Guys, very hot space. Billbee, you wouldn't believe how fast they're 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 2,000,000 to a $4,500,000 run rate in under, call it, eight months. Obviously, a lot of people want to invest. They've said no because they're profitable. They take $150k to the bottom line every single month. So very profitable team of 30 people Valuation,
10:41I think, is much north, you know, north of 30,000,000, but we'll see what happens there. They've got calls coming up. Churn and net dollar retention continues to get better as customers pay them more and more for additional products. David, thanks for taking us to the top.
David Pohlmann
10:52>> Thank you, Nathan.
Nathan Latka
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