How Boltsoftware CEO Sam Knight grew to $960.2K revenue and 50 customers in 2024.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is sam bolt he's building a company called boltsoftware.com his construction sas founder loves texas his family and mavs basketball sam i'm ready to take us to the top all right so what is bolt software and who are you selling to well my name is sam knight you call me sam bolt i'm okay if you want to call me sorry sam knight you're good man so software we're construction software but we're super niche we do schedulings how we get our foot in the door but we also do project management estimating for the residential home building market specifically those trades that are in that industry the electricians plumbers masonry companies so on and so forth and what got you into this did you software background first or construction background first no construction background first i painted houses to kind of uh pay my way through three unsuccessful semesters at texas a m um and then uh met my co-founder who has a background in the construction business as well and just kind of entrepreneur the company out of it so what year was that uh we started um january of 2016 is when we officially started okay and so you were painting before that 2016 you and define officially started like that was the first round of code or your first sale or what no that's when we started selling what we thought was the minimum viable product which was we quickly found out was not but that's when we officially started selling and marketing our product out to when did you write the first line of code um 2012 was when it first started being written wow okay so how were you guys paying yourselves for four years pre-revenue we weren't it was just an internal product that my co-founder josh was using at his dad's company they have a background in construction and so they took about four or five years to um start building up kind of a proof of concept at their business before we actually then spun it off we started getting some interest as a short answer around the industry in it and so that's when we spun it off into a separate product and something that we could turn into a business so how much have they invested you know cash wise in this product or four years before you guys teamed up and spun it out um good question i don't really know it was just kind of uh i mean once you're in the software business you're in the software business even if it's just internal so um that's a good question i honestly don't know what their spin was before we started the actual company what was your your co-founder's name josh so did josh's dad say hey listen fellas there's this is going to be a big company but i already spent 200 000 bucks of the construction companies money building this thing internally with you know two engineers so you got to pay me that or give me equity in the new company yeah that's basically how it is is um we kind of have a soft line of credit with him uh where we get to spend money but only if it's for a really dang good reason um so it's forced us to be really careful with our cash flow but the good news we haven't really invested much into it since then when you compare it to other companies yeah yeah but that doesn't address the the sunk costs that he and josh pretend you potentially already put in before it spun out in other words is the is the parent company josh's father's company are they on the cap table of the new software company uh josh and his dad are on the cap table of the new software cup okay got it got it got it so the dad is able to kind of be like you don't have to pay you and josh didn't have to come up with money to pay his dad and the company to spin out the software right no ner and his previous construction company has grown by massive amounts because of the software so he's definitely seen his reward well that well that would make me want to protect it even more uh that would if it was if i had a if i had this coffee mug that helped me grow my company really well and some and my and my son came to me with this other hot shot college guy who was painting out and said hey you know dad i want to spin it out i'm going well this coffee mug has driven me like 3x revenue growth i really don't want to spin it out unless you give me 60 of the company that you guys spit out then i'll let you spin it out yeah no they have they have the the majority of the equity so they there well there we go see now it's all coming together this is all making sense okay so so josh's father and and you know by nature the father's company owns a majority of the company you and josh though have enough equity where you're incentivized to build this on your own take your own crack at it have you guys bootstrapped the company uh or have you raced from traditional sources bootstraps okay great okay so bootstrapped and and um walk me through how you're pricing this thing so on average what are these folks paying you to use the tech yeah so we have a huge variety in our customer base up to a user with i think 600 plus users our small issues i think has two so we really start at about a minimum of about 500 a month regardless of if you want to use all five users so you know we kind of start at like a 100 a month for five users minimum and then we'll tear down um and we don't really we haven't really formalized like hey here's our publicly available enterprise level pricing but um we're pretty open about it during the sales process as long as we have a good buyer on the line as far as hey we have a tiered down approach starting at about five users okay so how many customers are you serving today uh 50 customers okay about 50 customers and where you at in terms of revenue revenue we finished up the year at 724. he looks over to the to the reports i love it all right so all right so about sorry about about 700 000 last year 724 000 in uh we brought in that revenue so our recurring revenue at the end of the day there was probably like 750 of them uh recurring was 750 yeah yeah in terms of run rate you're taking december 2019 revenue multiplied by 12 is about 750. yeah so today like last month you did about the 65 000 or something like that we tried to do our billing all up front but that's correct yep yep across 50 customers that means each customer is paying about 1300 per month on average yeah these we start them off at about 10 grand uh recurring revenue and then they bump up to about 15 averages what is enabling you to get them to bump up in other words what are you upselling against uh new licenses or new seats and then um additional features that we're rolling out we just rolled out an estimator and we're about to roll out some dashboards and just trying to sell deeper into our customer base yeah that makes good sense um what's the team size today how many folks uh nine plus a couple people on the dev side that we can scale up and down quickly so nine full time how many engineers um we just scaled back to three full time okay so three foot where were you at before that uh six and what made you cut half your engineering team um we're trying we're implementing a new it's popular in the construction world called eos it's just kind of an internal management system and we just need new people we need right people in the right seats so we're kind of going through a process of finding some right people for the next phase of the company okay any quota carrying sales i could use five more developers yeah any quota carrying sales reps yeah we just now launched officially kind of our first outbound like we have a full-time bdr and now a full-time quota carrying sales rep is the bdr have quota two are they incentivized based off a number of meetings set up or something yeah their quote is strictly um sals what is in a sale a sales accepted lead i'm sorry got it okay so you have your bdr who does not have quota it's just based off sales accepted leads and then you have your first kind of account executive that does have quota how would you set their quota target at right now it's pretty low um their quota is probably going to be right at 30 grand a month okay so you want them closing recurring revenue deals okay and why so over your entire company history you're at 65 000 per month right now they would have closed basically two deals to get to where you at today in other words you've never the founders have never closed a thirty thousand dollar a month account right so what do you or thirty thousand dollars a month in one month so how do you expect a new sales rep to do it we did in 20 uh with a 2017 we that was a year of just low-hanging fruit um i'm sorry 2018 was a year of low-hanging fruit and so we kind of made the the early entrepreneur mistake of thinking that we could just do it again last year um which is not the case without a formalized expert in that role so with some very bad salesmanship we did close sometimes four accounts a month okay let me just make sure i'm understanding this though you're saying you want this sdr to close every single month 30 000 a new mrr or over the first year that sales rep should close 30 grand in new mrr i'm talking annual recurring revenue yeah 30 grand of so basically three deals a month is your quota right now yeah so i just so just just also make sure i'm understanding so three yeah so it's not 30k a new mrr you're that sales rep is closing thirty thousand dollars a new arr at ten thousand dollar acvs every month so that sales rep in this first 12 or her first 12 months you're hoping will close 360 thousand dollars a new ar i see okay that that makes way more sense okay very cool so we'll see how that pans out um and are you profitable today nope how much are you burning uh we burned i think 115 last year okay so what like like last month you bought like 10 grand or something yeah it's about like eight eight to 11 grand and how do you cover those losses since you haven't raised is that the credit line you talked about and so how does that work well it's basically um an entrepreneur's dream where he's very gracious to us and uh whenever i go ask for the money it has to be for very very specific reasons with specific reasons and he's not in a rush to get paid back but um the uh i have we have a plan for profitability and that's basically how we've had to operate from day one is like hey how does this operate against our plan for profitability does he charge you an interest rate no so it's just free money free money so we all need rich dads yes i'm just messing with you all right high levels of trust and accountability when you're spending the money yeah and to be fair i mean you know you're burning i mean this is not a ton of capital that you're burning call it fifteen twenty percent negative ebitda margins right it was not bad on a bootstrap startup um talk to me about churn so do you know what your gross revenue turn is gross revenue churn um is like as far as our gross revenue retention i think it's like 90 okay so so 100 minus that take you take last so like last january and cap the mrr per account and so they can only go below that so that's as far as gross revenue retention i think it's 90 right now yeah so said so retention is like 117 okay and how to and how do you calculate that as far as those that same cohort of customers that paid one year ago versus what they're paying today yep so exactly so so there's the core from a year ago you lose 10 percent of that revenue but you expand 27 so net revenue retention is 117 percent when you add them together yep that's great and again you said that a 27 27 expansion is really coming from new seats and additional features yeah very cool all right any plans to raise capital traditional capital no plans i guess you don't need it when again you've got a nice good deal with the other company so niche too it kind of keeps away the vcs yeah all right um and what are you spending to get these new customers at it you know to get a new ten thousand dollar your customer what do you spend yeah right now it's about ten thousand okay uh okay so if you don't get all these paid up front you're having to deal with a cash gap of about 12 months right in terms of you have to spend the cac today and it takes you 12 months to get it back so are you just what percent of your new signups are annual upfront payments it's about 50 right now that we get either in a quarterly or um most of them are quarterly to six months yeah so the rest fifty percent are just monthly credit card payments yep all right sam let's wrap up here with famous five number one favorite business book mindset by carol black number two is there a ceo you're following or studying uh more a coach coach duke blue devils elon musk you throw them in there number uh three what is your favorite online tool for building your company man we heavily utilize hubspot that's like our go-to place for everything number four how many hours of sleep to eat every night probably six six and a half okay not bad and situation married single kiddos married with four kids holy mackerel you're a busy guy wow how old are you holy moly okay uh okay wow you have like five startups four four kids one startup 30 years old and uh take us back last question or your 20 year old self what's something you wish he knew i wish i knew that i knew nothing guys there you have it bolt software helping uh residential construction uh folks with scheduling spun out of a another company now today doing about i caught uh 65 70 000 a month in revenue uh growing nicely year over year they are bootstrapped they burn between five and ten thousand dollars per month they cover that burn with a credit line that they've set up and negotiated serving 50 customers founded first line of code 2012 uh spun out 2016 first sales 2017 scaling nicely sam thanks for taking us to the top these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now