How Codiga Reached $15K/Month Revenue with 50 Paying Customers from 15,000 Free Users (Interview with CEO Julien Delange)

Introduction: Julien Delange and Codiga

Nathan Latka

00:00Folks. My guest today is Julien Delange. He's the Founder of Codiga, a company that helps developers write better code faster. He was a tech lead at Twitter and Amazon Web Services before this. Julien, you ready to take us to the top?

Julien Delange

00:11>> Yes. Okay. Thanks for having me today.

Nathan Latka

00:13Hopefully, you have lots of Twitter stock and lots of AWS stock. Right? I had.

Julien Delange

00:20>> But, you know, at some point, you take the jump. And when you make the jump, you need to sell your stock. Okay. When did you jump? Last year.

Nathan Latka

00:28Ah, so you just launched the business last year?

Leaving Twitter to Go Full-Time on Codiga

Julien Delange

00:31>> Yeah. So I you know, like many people that come from tech, I was doing the company a little bit on the side. And at some point, I decided to to go full time. So I left my job at at Twitter and and went full time last year. At some point, I think it's really important to have an area of focus, and it's really hard to, you know, be an employee in a large company like this, especially

00:57>> when you have responsibilities such as leading leading a team and making a startups. Like, a startup is a full time job by itself.

Nathan Latka

01:07No. I totally agree. So this makes sense. Now you were working on this by yourself. You you took the leap and you quit. Help me understand what are do you have customers today? And if so, what are they paying you for?

First Product: Automated Code Review and 15,000 Users

Julien Delange

01:15>> What's the what's the tool do? Yeah. So we started with a tool that do what we do what what we call automated code review. So you push your code and then we detect vulnerabilities, coding style issues, all the issues you're going to have in your code. So before you deploy your code in production, we find these issues. That first product attracted more than 15,000 users. On these 15,000 users today, we have about 50 paying customers, but

Pricing Model and Average Contract Value

Julien Delange

01:45>> the customers that are paying are a pretty large customer. We only charge when your team is more than five users, so we want to give the tool for free to most of the users, including individual users, and then focus on large companies. If you think about it, you have companies like Dropbox, only 1% of the user are really paying users, and this is kind of the same model. Mhmm.

Nathan Latka

02:10And so when someone is paying you, what's the average company paying you per month to use Codiga?

Julien Delange

02:15>> Oh, it totally depends on the number of users, of course. So we have large companies and small teams. So the size of the teams depend between roughly 10 to 50 users, so it's about 500, you know, at most per month or a 100 or 200 a month per team.

Nathan Latka

02:38Okay. But maybe a sweet spot might be 2 or $300 a month for 20 to 30 seats.

Julien Delange

02:43>> Yeah. That's correct. I see. So we started with this product, and and at some point, we realized that we are only analyzing the code when people push the code. So you write the code and when you are done you push it. And then we realized pretty quickly that in fact what we need to what we need to do is help the developer write better code upfront. So think like you are writing the code, like you write

Second Product: The Coding Assistant

Julien Delange

03:08>> a Google Doc, you have real time suggestions about what you should write, how to improve your style, and so we started having the product called the coding assistant that suggests block of code

03:25>> the developer. So as you write code, we suggest what you should write.

Nathan Latka

03:29Yeah. This makes lot of sense. You're using ideas and code snippets that are have already been validated by thousands of other developers.

Julien Delange

03:37>> Yes. That's correct. And right now, on the platform, as we have 14,000 users, what we really did is grow the platform as much as we can, use this user to put code snippets, and so we have an engine after that that match what you ask, like for example, read a file, you know, get data from Twitter, and then we suggest block of code. Mhmm. That product has been in development right now for six months, and we're

04:00>> gonna announce a a public launch within the next one or two months.

Nathan Latka

04:07Oh, 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 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 your

04:30Stripe 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 get

04:55a 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 not

05:16built 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 going

05:42out 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 if

06:04you 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

06:30interview. So 50 paying customers at $300 a month. You're doing about 15,000 a month right now in revenue, something like that?

Julien Delange

06:37>> Something like that.

Nathan Latka

06:38Okay. And what were you doing exactly a year ago? Do you remember?

Julien Delange

06:42>> Oh, zero. Zero.

Fundraising: $2.1M SAFE Through Techstars Boulder

Nathan Latka

06:43Yeah. Okay. And have you bootstrapped this or did you decide to raise capital?

Julien Delange

06:48>> Yeah. So that's an interesting story. I I went through Techstar's boulder. So so I did that last year. I went through Techstar's boulder. I was on the fence about raising money, And at some point, you know, you when you really want to develop a great product, I think having VC capital coming is really helpful. So I raised capital last year. How much? $2,100,000. Okay. And and we raised I learned a lot by by by raising

07:24>> because you learn a lot about the different how you basically, fundraising is like selling. You sell yourself. You sell a story. You you you sell a future, and it's something that I had to learn. It was really interesting. It took me a few months to complete the fundraise, but I'm really glad that we were able to raise with really known investors in The US, either angel or traditional VCs, and you have great support from them.

Nathan Latka

07:57And so you raised 2.1 on a pre seed. Was that on a note or a priced round?

Julien Delange

08:02>> It was a safe. So you have this safe from Y Combinator that is right now pretty used for all the startups. And with the safe, which is really great because you can simplify the way you raise money.

Nathan Latka

08:15So there are two kinds of safes. Ones are capped, and there are others that are uncapped. Was yours uncapped?

Julien Delange

08:20>> No. No. No. It was capped.

Nathan Latka

08:22Okay. Most people when they're raising their pre seed are selling, you know, 15 to 20% of the business if they convert at the cap. So was your cap around a 10 cap, 10,000,000?

Julien Delange

08:30>> I will not will not disclose the cap. I'm not

Nathan Latka

08:34I nailed it. I nailed it. I'm right on the money. 10,000,000 cap. Okay. So what what's next?

Julien Delange

08:40>> So next next for us is really about pushing this product for the coding assistance. The reason why, it's because we believe that you're gonna need to have more and more software in the world, and you're have more junior developers. Software is eating the world, you probably heard that phrase before, and the main issue you're gonna have is having junior developer write code really quickly. And I really I'm making a big big bet on this product that

09:08>> we're gonna launch in the next two to three months. I think we have an existing customer base that we can, you know, use to promote the product, but what we what I really want to do is having a bottom up approach. So have the product go viral. Don't care about revenue. My investor would probably not like this, but try to focus on product market fit and retention.

Nathan Latka

09:30And, Julien, how do you so I guess, let me ask some contextual questions, and then we'll talk about retention. How many are on the team today full time?

Julien Delange

09:37>> Today full time, we have seven people.

Nathan Latka

09:39So okay. Seven people. And all engineers?

Julien Delange

09:42>> No. Actually, I have one one developer relation. I have some engineer. I have some people that also do marketing and write content. Mhmm. So not all all developer. I think Tech Founder sometimes has has an issue with only hiring technical people and believes that all the issues are technical, and I think for tech founders, need to learn how to do marketing. This is something I'm I'm learning myself. Well, how did you

Nathan Latka

10:05get 15,000 sign ups on your first product?

How Codiga Acquired 15,000 Users via Marketplaces and Blogs

Julien Delange

10:08>> Oh, that's a that's a that's a good question.

10:13>> Take people where they are try what I did is try to look online where people are looking for such a product. So do a Google search and try to see where people are looking for you. So I I wrote a bunch of blog posts, and I put the product on different marketplaces where people are looking for such a product.

Nathan Latka

10:35Name three of those marketplaces?

Julien Delange

10:37>> Yeah. So we are present on the GitHub marketplace. So what is that? Oh, g two? No. GitHub. So GitHub. Yeah. GitHub is where you put your source code, so it's really easy for people to find you on the GitHub marketplace. We also present on the Bitbucket marketplace, Atlassian has also a marketplace, and every IDE here. What was the middle one? Bitbucket? Yeah. Bitbucket. Yeah. And and also every developer to have kind of a marketplace when you

11:06>> can propose your plugin and your extension to our present on this marketplace, and we try to retarget specific keywords for people to find us. So if you are using GitHub and you want to have code review, you type code review anywhere here. Same thing for for Bitbucket. For the IDE, it's the same thing. You just go in your IDE, you look for code snippets or coding assistant and we're here.

Nathan Latka

11:29Mhmm. So how many users it has GitHub driven you?

Julien Delange

11:35>> I would say today so it's really interesting because you see different type of customers. We have a lot of user from GitHub, but most of the users are free users. On Bitbucket, we have way less Bitbucket users, but these users come from companies, and these companies are more paying customers. So the behavior is different, but the GitHub user are driving growth, and, you know, you have the word-of-mouth. People just start to use you on GitHub. They're

12:04>> gonna talk about your product to their colleague, and then they're gonna sign up. But then Mhmm. It's real that they're gonna pay.

Nathan Latka

12:11What I don't understand is most apps getting thousands of users from these marketplaces have dozens of reviews. But on the Atlassian marketplace, Codiga has one review. There's no reviews on GitHub, and I haven't opened the last one yet. So how are they giving you this much traffic?

Julien Delange

12:26>> Because of the numbers. Number of people Downloading? Yeah. Exactly. The number of people also on on GitHub. Like, just GitHub today is such a massive website with so many users that if you can capture only a few percent of the number of users, it's gonna drive a lot of traffic.

Burn Rate, Runway, and Growth Strategy

Nathan Latka

12:47So you have a new tool coming out. Your team's growing, seven people. Obviously, you raise money, so you have plenty of runway, but your number one job is to not run out of cash. You you have to manage burn. Right? So how much are you burning per month right now? How many how many months of runway do you have?

Julien Delange

12:58>> Right now, we are burn we are burning about 50 to 60 k a month.

Nathan Latka

13:01And does that make you nervous, or are you okay with that?

Julien Delange

13:04>> I'm totally fine with that.

Nathan Latka

13:05How many what is that? Twenty four plus months of runway?

Product-Market Fit Before Monetization

Julien Delange

13:08>> Yeah. That's correct. Yeah. So so the goal right now is really to be conservative on the runway because what I want to do is to get product market fit. Have a tool when people come and use it every single day. That's really interesting because for the code review platform, initially when we started to use it, saw different behavior for the user and for the enterprise. Enterprise use it almost every day. User again use it every day.

13:36>> What we want to have is a coding assistant that people use every single day. So right now we really focus on the product. Once you have this product market fit and this retention, then you're gonna increase the spending, the monthly spending for for doing more marketing and and more more marketing and more sales.

Nathan Latka

13:55Mhmm. That makes a lot of sense.

Julien Delange

13:57>> It's more conservative right now because we developed the product. Once we lock product market fit, let's go and make more marketing and more sales. Mhmm. Mhmm. Mhmm.

Famous Five: Books, CEOs, and Tools

Nathan Latka

14:08Well, we'll see what happens. We're certainly rooting for you in your new product launch. But in the meantime, Julien, let's wrap up with the famous five. Number one, favorite business book?

Julien Delange

14:16>> Oh, I think the favorite business book will be Principles from Ray Dalio. I I think that's a book that gives you principle for how to manage a company, and I apply some of these principles at at Codiga.

Nathan Latka

14:34And number two, is there a CEO you're following or studying?

Julien Delange

14:38>> Maybe that that one will be a little bit controversial. I like Brian Armstrong, his story at Coinbase. The way he manage a company is really principle driven, and I like that.

14:52>> Number I think yeah.

Nathan Latka

14:53That's great. Yep. Number three, what's your favorite online tool for building a business?

Julien Delange

14:57>> Okay. Maybe this one is really silly, but something that helped me a lot is Calendly. Because you don't need to to go back and forth with two or three email and follow all this email about finding a time. Calendly is simple. One link and you you schedule a meeting, you got it.

Nathan Latka

15:16And number four, how many hours of sleep do you get every night?

Julien Delange

15:19>> Not enough.

15:22>> Five or six hours.

Nathan Latka

15:23And what's your situation? Married, single, kids?

Julien Delange

15:26>> I mean, look at how I'm dressed. It's almost. I'm single.

Nathan Latka

15:32Okay. Not married. Got it. And any kiddos or no?

Julien Delange

15:35>> No. No kids.

Nathan Latka

15:36And how old are you, Julien?

Julien Delange

15:38>> I'm 38.

Nathan Latka

15:3938. Last question. Something you wish you knew when you were 20.

Julien Delange

15:43>> Network more. Network more. Build your network. At the end of the day, for example, for fundraising, people are gonna invest in you because they know you, because they believe in you. Build your network. Always stay outside of your comfort zone. It's something that is really important.

Nathan Latka

16:00Guys, was at AWS, at Twitter as an engineer, launched and sort of took the took the jump in 2021 to launch codiga.io. Think about it like when you open a Gmail and you hit reply to Gmail, and it suggests a bunch of things you should write back. He's effectively doing that for writing code so that junior developers can write code much faster. He's not focused on monetizing right now because he's raised a bunch of money, 2,100,000

16:19pre seed round at a 10,000,000 valuation. He won't confirm that, but I know it's accurate. 10,000,000 valuation. He's got about 50 paying customers from 15,000 total trialing users doing about, call it, $15,000 right now in monthly recurring revenue again, but not necessarily looking to monetize. There's a big product launch coming up. Want to get a lot of free users first and monetize. He has plenty of runway, burning 55,000 a month right now. Julien, we're

16:41rooting for you. Thanks for taking us to the top. Thanks.

16:45One 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

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