How Ethn CEO Nate Bolt grew to $5M revenue and 150 customers in 2024.

hello everybody my guest today is nate bolt he's the founder of ethno a five-person SAS company he's four he's the for research manager at Facebook and Instagram and as a CEO of bolt and Peter's and faculty at the SVA I XD program we'll jump we're not in a second he's also a co-author of remote research and once drone the NYPL based in LA at with his wife son and two dogs Nate are you ready to take us to the top yeah all right break down those big acronyms for us what does faculty at the SVA ixd program mean oh yeah it's a design graduate degree at School of Visual Arts in New York so they do a lot of research as part of their you know kind of degree and and they bring in different industry researchers to help teach some of their graduate courses there's been years since I did that but it's a cool program very cool and then just peel back the onion a little bit give us a glimpse into what you're doing as research manager at Facebook and Instagram yeah that was that was helping to manage you know these smaller teams of experienced researchers or design researchers they're there on the product teams along with designers researchers data scientists engineers and their job is to put a little bit of a human face bring some empathy into that product design process where you have mountains of data you've got metrics galore but sometimes you know you need to travel to a different culture different country or at least do remote research to get a face a human face on these interactions you know put some why behind these what trends that you see in the data yeah yeah this sounds burnt you know we just have the the CEO of user testing on the show and oh yeah Sarah yeah Darrell yeah yeah he was great and you know he came on and shared you know shared numbers you know they're hoping for 40 percent year-over-year growth this year and you know that I mean you know they're numbers they're clear crank in it he also said human human human and my answer my question to him was like you've got full story taking off you got like Hajj are taking off kind of data oriented how are you differentiating from those kind of platforms it's such a good question and you know the field of human-computer interaction HCI that sort of comes from cognitive science the basic concept is that forever as long as there's been an interface there's been people that have trying to automate the process of understanding how it's used you know back to the even the military and the 70s developing you know pilot interfaces an airplane the idea is like men can't we just use computers to generate patterns and trends and data on how the actual humans are using these computers and if you're talking about computers watching people use computers there's a problem there you know and a lot of these tools like hot chair and and even user testing to a certain can extend although they're very human focused they're automating that feedback loop and you need to have humans watching humans use computers to really complete the design process most you know product designer these days there's been it's a funny pendulum swing year-to-year but a lot of product designers now get that that qualitative insight is a key part of the product development lifecycle it's just too easy to say like I just farming out we got analytics you know what do we need humans for it's not like we're actually building for them yeah well so what we through how you're actually solving this right so how's the product work yeah I mean in FDA's case we're very niche you know we're targeting professional UX researchers teams of like two or more that's at me oh it's the logistics that come into play at scale you know if you and I just need to watch somebody use our kind of early stage tasks it's pretty easy to do that you know we can grab somebody to coffee shop we can even get family there's not really logistical challenge around small-scale one-on-one human observation but when you're talking about 50 researchers 75 countries 30 studies you know 22 product teams all of a sudden the challenges in finding the right participants scheduling them paying them tracking them storing them they magnify you know and you're talking about the age-old SAS competitor of spreadsheets yes spreadsheets on spreadsheets on spreadsheets so that's really our thing so I have my own product I'm working at Intuit I were launching a new app I want to target based off like device browser location operating system something like that maybe purchase history yeah I launched a survey inside of into it so that I know that I'm getting my users who already know Intuit to take this kind of user testing what do you so you get their contact information I'm into an employee what do i do do I set up a Skype call and a screen share and I watch them use the app like how is it actually done yeah that's that's exactly right but there's a key point there that's a little bit different and that's for a company like Intuit who's had over the years like 40 five different you know f neo integrations they pass the variables to an ethnos screener screeners just are like word for survey it's the same thing but functionally instead of it being about aggregate data they can pass all those things that you just said to our intercept but the thing is when you're internally using a survey tool like let's just say Qualtrics or 4c or these tools that are designed for aggregate data there's all these little things that don't work the same way when you're talking about getting a real human for one-on-one research so they implement F you know JavaScript or like iOS or Android whatever they're passing all that stuff straight to me�� because their researchers can go in and modify that stuff dynamically like on the fly you know you get to people using QuickBooks and you're like ah we should have asked about their you know XYZ criteria that we forgot so they can dynamically modify the screen or modify the targeting and then their next participant let's assume it's a remote session and zoom or Skype or you know all those tools it's up to each research team for the testing but they can modify the criterion if you know really quickly that's kind of our game that I see I see okay talk to y'all pricing so I'm sure you have a bunch of cohorts but I don't go to on every kind of use case story well what's the average customer pay you per month would you say you know most of our customers at this pune enterprise so our our license you know they they range from you know on the enterprise side well let's start with self-service you see it it's on the pricing page it's like you can do a self-service for like 80 79 80 bucks a month yeah the enterprise stuff you know you know this game it's like all over the map to be minimum typically yeah minimum is like I don't know eight or 10k year cool and then on up from there depending on the size of the team yep 10k might just be like the minimum features a very very small team jump in try it out yeah and and just to be clear that's more reflective your average than an $80 a month price point yeah it is because I think the value proposition for SEO is more centered on larger teams at this point it's evolved over the years yeah put all this on a timeline for me when you launch so side project starting in 2006 we had a research agency and this was like haters what's that this is what both Peters yeah right that's right yeah so in SF doing the kind of consulting thing we realized there was a need just for us that that kind of thing so side project from 2006 to 14 and then it was really you know when I left Facebook in 2014 it was like to work on em you know full-time so it's been you know three or four years of like full-time focus and now we're you know five or six people and bootstrapped continuing to grow that way that's great you so you've decided to kind of stay blue struct which I love what have you scaled to in terms of total customers without raising capital yeah so we're like you know 150 paying customers a month but some of those have 80 or a hundred accounts you know seats so there can be pretty large teams yeah and then something like 2,000 accounts and across the freemium pret spectrum yep yep no that's great if I jut mean so can I kind of back into this right if you've got a hundred and fifty kind of in your enterprise cohort at ten grand a year you know that means you're doing what just in that segment in north of 125 grand a month something like that so that's exactly right cool cool and that'd just be clear that doesn't count yourself you have more revenue than that could sell there's some self-serve stuff that's right that's right but that's a pretty small percentage and shrinking of our total revenue yeah okay good so you're definitely moving more towards again higher touch Enterprise five person team yeah that's right give me some of the growth so where were your figure out hundred to about 30 months say roughly thirty percent year-over-year one of the things that we're seeing the biggest growth in is paying research participants internationally okay that's a weird sort of thing that we've offered for years and it's just been exploding recently because if you have somebody in Brazil or China actually paying them in a way that's decent is terribly hard there's no like Brazil it's like boletos or like totally you know even shy know like there's China Amazon but there's some other stuff and like it's hard to get those accounts let's say if you're in the u.s. you have to have a Chinese credit card to get a Chinese Amazon account and so then to issue a Chinese Amazon gift card you have to go through like these third-party aggregators there's a million of them but like purse calm or tango card or and they're not really built for researchers so that's been like a side offering for us but just lately in the last couple months it's been exploding because a lot of these product companies need to handle their international participants much more carefully now they they're trying to grow and expand in all these developing countries and just paying somebody in a country that's that's maybe not as popular in the roadmap of gift cards is hard yep are you up because of your expansion activities are you above 100% net revenue retention annually today or no just bear barely okay good good so so your expansion is just about making up your lost revenue okay and and the ones that are turning are there as mostly the self serve folks that's exactly right although you know we see some enterprise to turn you know these teams very understandably need different tools different teams you know how it goes yeah well I mean the reason I ask is these kinds of tools I have before you know seen serious seasonality where like q1 they're doing a big test right and they want to like check all this stuff or they're like on six months Sprint's right so every like once a month two times a year they they ramped up these kinds of you know paying you and then they go away for a while do you see this kind of churn you know we used to see it a little bit on seasonality but the size of the team's buffers against that a little bit so what's your more than five researchers like somebody's usually always actively engaging even if a couple people are like on that long term we're taking a break now before we get ramped up again yeah okay talk to me about getting these new customers so a $10,000 a cv account what are you willing to spend to acquire that customer you know we right now spend zero dollars on marketing and sales and that's I think it's kind of cool but it's really stupid on my part long term so that's an area we're looking to like get better at we just do inbound word-of-mouth okay all counts we have we do zero outbound zero sales marketing which it's like would but that's like dumb I'm not proud of that in the slightest that's look it's it's something that I wait like if you don't know the number it's good because you haven't spent money but it's bad because well how do you scale right exactly yeah so number six people you have right now on the team to work them down Tsin okay just you know yeah okay one salesperson you and then four engineers okay so theoretically you could take your salary plus the salesperson salary divided by the number of new customers per year and kind of back into some hole yeah totally that's you know one of our big priorities for let's say early next year are you guys all spread out remote locations yeah so you got it that's awesome that's very good what do you so so as you do start launching some paid experiments how do you think about setting up the framework for a good experiment and and the decision tree that you'll use at the end to determine whether to you know do that more or less well you know for me when I'm looking at all the types of marketing and sales initiatives we can do I keep you know cuz people do content marketing they do different kinds of spending on sales and acquisition in our weird weird niche space cuz we're not even like let's say user testing is in the much more broad arena of like consumer research so they get tons of different types of customers using it we're literally professional UX researchers are like 75% of our customer base so how do we build and you know market to those people who have incredibly specific needs I actually think we're gonna build a spin-off brand just to offer value to them as like a way of doing functional marketing I know it's a bit weird as a good growth strategy may like professional services stuff yeah yeah yeah yeah you know no I mean they're doing wrong with that if it drives up lifetime value and stickiness to the SAS product yeah and I think EFI knows have been locked into this professional only arena and it also allows us to target more people yeah okay so bootstrap today thinking about raising capital or no uh-huh no with a prefer not to I think you know when you see these buffer articles and you know there's like this funny trend of buybacks happening right now either either for real or fake outs and I think you know I'm just feeling more and more ammunition over the years to keep the bootstrapped if we can cuz we're growing well I think we're positioned very long-term I'd love to have this thing for years and years and years and had designers and you know more marketing and sales stuff that we need and it seems like we'll be able to do that bootstrap I mean who knows but yeah so face for those Nate we want you back we've got these other products to work you on what are you doing right now per month on Drive okay whatever will pay you you know 10x whatever your ARR is you take the deal and sell or no I think it's just we're in such a little niche here that were providing value for these specific types of researchers and we're able to keep growing and I'm happy to do that good alright let's wrap up here with the famous five number one what's your favorite business book favorite business book I mean I guess innovators dilemma is it cheesy to say that no it's not cheesy yeah number two is their CEO you're following or studying right now um you know I like the buffer guy I forget his name but Joe is awesome yeah Joel yeah number three what's your favorite online tool for building your business mmm man I guess right now call the house clubhouse good number four how many hours of sleep do you get every night okay that's pretty good Scituate married single kids married one kid one kiddo how are you he's a year ago and how are you oh I'm forty forty okay last question what he was your 20 year old self new oh man that's a great question I think you don't have to stay in San Francisco quite as long as you did guys there you have it you don't have to stay in San Fran as long as you think you need you if you want to build your own company he's cranking along with ethnic again launched in 20 2006 raise a side project ended a stint at Facebook quit Facebook full-time to go full-time into F neon 2014 still bootstrap now five or six people all remote really helping again with UX research and really recruiting for UX research using different things like they have built-in like screeners dynamic testing and things of that nature today doing 125 grand per month in revenue grande 30% year over a year's to call it 90 grand a month just about a year ago serving about a 150 customers that pay on average call it 10 grand per year oh about a hundred percent net revenue retention annually again growing at a pace that he loves being bootstraps thank you so much Nate for taking us at the top thanks bigotech me