Djaodjin Revenue & Valuation (2024)

hello everyone my guest today is sebastian morello he started a video game studio back in the day built a microprocessor company and built two sas businesses before his current company zhaojin if you believe a couple semiconductor patents uh he's quite if you believe in patents he's quite an engineer though some people remember him as a group fitness instructor he's married with kids and has a bad ambition to help people run sustainable micro businesses sebastian you ready to take us to the top yeah hello nathan good to have you okay so you're a fitness instructor and a sas entrepreneur huh i was a fitness instructor not since i have kids you're not like a soul cycle instructor you get up on those things and you know do dance moves and all this kind of stuff i was doing uh capoeira and uh like punching stuff you know that strikes me as a better fit for you you look like a tough you look like a tough guy you gotta be tough as an entrepreneur all right so first off if people listening want to follow along the name of this bad boy is a little complicated so so listen it's d j a o d j i n dot com xiaozhin so what does the company do sebastian we host uh billing and profile pages so if you build the sas you kind of need all of this and that's what we provide okay and what do you charge on average per month for it uh we charge a 119 a month and then we have multiple shares depending on your traffic okay and when did you launch this when did you get your first customer about five years ago okay so call it 2015-ish uh yeah something like that yeah and tell us that story how did you get your first customer do you remember where uh yeah i mean it's all by referrals you know we were doing a lot of uh upgrades on sas businesses you know so we were doing professional uh consulting and then uh we decided like everybody needs the same thing so we're just gonna build it and then sell it on the hosting basis and that's what we did but but where did you find your first cut i mean did you go to a forum or no first customers it's all referrals it's basically people we used to work with before and we told them like listen we are not gonna charge you per the hour anymore we're just gonna charge you a flat fee but you have to work with us on our platform so did you have an agency before this yes yes okay what was it in my agency uh there was not really a name for it so you were doing consulting work yeah way too much yeah i see okay and like how what was your best year in terms of revenue for the consulting work the best plus what best year in terms of revenue uh the first year yeah the first year was the best yo it's what year was that uh 2009. and how much revenue did you do we were doing about 200k okay and what gave you the confidence to shut down that revenue stream to go all in on xiaozen a software company uh because if you do an agency you get paid by the hour you know and uh so i was i was thinking we're just gonna make more money uh and it's gonna as soon as we decouple uh you know how much money we make from the hourly then we have a potential to go higher that's why yeah okay so you got your first customer from some from some of your old agency clients this was in 2015 for your software project how many customers are now serving today uh that's a very good question because it really depends on how many people are paying us or how many people in general we are doing uh but i would say like yeah um you know it's a b2b so i would say like we have 12 people uh paying us and then uh total how many customers it's uh that's a lot uh well what's the difference between someone who's paying and how someone you're calling a customer or don't isn't that the definition of a customer if they're paying you well we have a model like wordpress so we do have a lot of people using our products but we just don't know about it it's all open source so they are customers in a way because you know they learn about our products they like call their support when they have questions so we actually find out about them when they start asking questions but they're not paying us directly you know so it's like you know they're not signing up for our service but they're using our products so i would still call them customers because we provide support i see i see okay um so you have 12 customers paying and twenty dollars a month so you're doing about fifteen hundred dollars a month in revenue no no no no they yeah well no that's what we charge but we have some people we charge them a lot more than that because we have a bigger website so we're making about six thousand a month right now in recurring revenue some people they pierce uh you know five thousand we have one customer pay us five thousand and then we have the over 10 11 paying us like 119 or 250 so yeah so you're doing six grand a month today what were you doing a year ago a year ago we were doing about the same but we had a larger share of professional services right this year we don't have any professional services uh at all it's all uh hosting fees well so so how do you scale this right how do you go from 12 customers to 24 customers that's a very good question it's the most difficult part at this point you have to rename the damn company this this domain name is impossible is it it is impossible there's no word of mouth i mean is it impossible to pronounce you're right you're right uh that's a that's something we've been thinking about uh actually when we got our biggest customer we actually had to write on the website that the company was a california company because many people thought it was a chinese company so we had to reassure our customers that we were a us company and a california company but i mean what's taking you so long it's so blatantly obvious you need a new domain name what why is it taking so long uh because it's not the priority like you know we we do support our customers so what happens is our revenue doesn't grow but our customers revenue by using our products is growing really fast so as a result we spend a lot of time supporting our customers and their business for that though that's the problem that's correct uh but at the same time you know when we get bigger customers they make more money then it's gonna help in the future so so it's a long term play i think you have to be more selfish you're doing too much free work uh that's what my wife says all the time yeah what does your wife do right now she takes care of our kids how many do you have we have one and another one on the way for december oh that's exciting and you're in san francisco right now right all right yeah what's it like being locked down with a pregnant wife and a little one already there uh that's crazy uh that's really crazy like what do your mornings look like i'm sorry sorry what happens in the morning what is your morning what do your mornings look like so the morning is i wake up you know and then i look at my emails and there's a lot of calls and things from europe showing up and then my kid wakes up and so i have to stop everything take care of him uh my wife wakes up and she starts making calls and you know so like yeah it's it's all chopped up the whole day shop it's fun so your domain name makes it very hard for people to refer people to you because you can't say it over the phone you're but you're built on open source how are how are these customers finding you today uh github mostly github okay explain i'm not familiar with sort of how that works so explain that how do they find you and so usually what happens is uh people look for something like sas frameworks or they look for tools to build sas businesses and by chance they always end up on github because it's like the biggest repository of open source so that's usually how people get especially developers they get there they find our products and what happens is chao jin is it's a hard name to say but it's very close to django and django is the technology we're using so actually for developers it's not that bad uh but it's true that for um you know decision makers it's harder to find us so you should rename your company hango because h is next to j on a keyboard so anytime someone misspells django they'll on github they'll find you which ah interesting that's a really good idea yeah actually we haven't renamed the company because i didn't had a good idea yet so that's very good thank you so much i get 10 of all your new revenue all right that's fair enough i thought you taught punching you're supposed to be tougher than that you should say no more than five nathan all right have you done this all bootstrap sebastian all right yes bootstrapped okay that's great and um are you thinking about raising capital or no i am thinking about it yes because at this point uh we do need capital if we want to scale and especially support the kind of customers that we have uh it's just you know we start to have very very big customers and uh we need uh we need a certain scale to be able to support these customers how much do you want to raise i think at uh 500k to start and how much of the company would you sell for that much uh that's a very good question it depends who i'm raising it from uh you know if i raise it from partners that are interested to contribute to the business then i think it you know a significant part might be good if it's people purely putting money then i would give less of a company so how what is a lot if a strategic was going to do it how much would you give them a strategic i could go all the way up to 40 percent you know because i at this point i i need to hire people so somebody that comes with money and believes in the products wants to put money and work there then you know i have no problem with that so you would do something like raise sort of 500k on like a 800 000 pre-money valuation or 900 000 something like that or a million sorry they get 40 of the company yeah and you build it together yeah yeah otherwise you know if it's pure money i would i would uh give a lot less of a company because we need that money to have people working here yeah yeah okay how many people are on the team today three three and all of you are engineers uh correct yes very good what's your turn today well return is very simple if somebody if a business doesn't make money usually they shown within a year or two uh if they start to make more money than they have to pay us then we have these customers forever so return has been like one two percent at this point got it and and walk me through um sort of your famous five here so the first one is what's your favorite business book or my favorite business book i haven't really thought about it but i like um i think it's the sales machine or it's a book yes yes yes that's a good one number two is there a ceo you're following or studying uh natalya from microsoft uh yeah number uh three is there a favorite online tool you have for building your company an online um don't know yeah it's a hard question i don't know uh your answer is github yeah mostly like yeah github yeah yeah i guess yes yeah number four with the pregnant wife and a little one there how many hours a sleeper again every night uh it's not every night it's basically four hours during the day maybe two hours during the night you know you have to shift your schedule all right and so married one kid another one on the way and how old are you i'm 42. 42. last question sebastian what are you wishing you knew when you were 20 what i wish i would know it's uh it's not easy to find good people uh i got lucky when i was 20 i built the company and uh you know the team just came together so when i was 30 and i did it again i thought the team would come together and uh now i realize it's actually hard to get the team to get together guys giaon.com doing six thousand dollars a month in revenue from about 10 customers sebastian founded the company a couple years ago called 2015. he's looking at potentially raising 500 thousand dollars right now would sell up to 40 percent of the company if the deal was right the partner was right but until and he's focused on growing mainly through github searches as he integrates with django and a lot of people find him that way sebastian thanks for taking us to the top thank you so much nathan