How Keboola Reached $4.9M ARR Bootstrapped with 175 Customers in 2021 (Interview with CEO Pavel Dolezal)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Pavel Dolezal. He's building a very cool company called Keboola. He helps companies utilize data to grow their profits faster. Pavel, are you ready to take us to the top?

Pavel Dolezal

00:10>> Yes, Nathan, I am. You for inviting me.

Nathan Latka

00:13So is Keboola is this that's k e b o o l a, guys, if you wanna follow along. Is this for marketers or developers?

Who Keboola Is Built For

Pavel Dolezal

00:20>> Well, it's actually for developers. It's for, you know, people that today would be called data engineers or analytical engineers. Mhmm.

Nathan Latka

00:27And where did you get the idea?

Origin Story and Founding

Pavel Dolezal

00:29>> Well, it's actually it's kinda like scratching our own knee. You know? So the company was actually founded over ten years ago. It was founded by Petr Simecek, and it was a developer shop, you know, helping companies to migrate to cloud. And they noticed over time, you know, everybody wanting the same things regarding data, to integrate, to warehouse, you know, to transfer transform that. And they just didn't want to do it again and again, you know, doing

00:52>> the DevOps script. So they started to build an, you know, internal tool for automations. That was about 2,015 when I met them, and I was like, guys, you know, this internal tool, this is we should build a product company around it. So we got together. We, you know, like, we we actually rebranded Keboola as a as a product company, started to be, like, the name, so we kept it, and we've been going on since.

Joining as Co-Founder and Equity Split

Nathan Latka

01:17And and how big was the agency in 2015? What was agency revenue that year?

Pavel Dolezal

01:21>> It was actually I don't really know, but I remember, but it was really small. It was five, six people. So I

Nathan Latka

01:28>> Yep.

01:28Yep. Got it.

Pavel Dolezal

01:29>> I can dig it out. It was 400 k or something.

Nathan Latka

01:32Well, so what happened, though? Did you buy the technology from them, or are they still on cap table or what?

Pavel Dolezal

01:38>> No. No. No. We actually it was back then, it was it was two owners. It was Milan Veverka and Petr Simecek. And I joined as a as a as kinda like the third co owner, and we founded the product part of the company. So we just, like, we got rid of slowly the the the, you know, like, the revenue service revenue, which was you know, and started just focusing on the platform revenue.

Nathan Latka

02:00I see. And when you joined, did they give you like, did you split it evenly? A third, a third, a third?

Pavel Dolezal

02:05>> Yeah. It was actually it was actually hard. I had to make yeah. I had to actually I had to work for my share for three years. So it was not you know, it was actually how we like it. It was real, and it was really open. And we're like, yeah. We would really love you to be our partner and, you know, like, be cofounder of this, but, hey, you know, like, you are new. We don't know

02:22>> you. So are you okay if you, you know, earn your share, you know, over the period of three years? I was like, I like it. I'm okay. I love it. You know? It's just how it should be.

Nathan Latka

02:31So how much do you own today?

Pavel Dolezal

02:33>> Oh, we we all three of us have a split, 30%, one third.

Customer Count and Product-Led Growth Launch

Nathan Latka

02:37Oh, I see. Okay. Got it. So you own 30%. That's great. And then let's talk about, like, how customers are using SUSE. So how many customers are paying today for the tool? Mhmm.

Pavel Dolezal

02:46>> Well, it's actually interesting. You know, like last year, it like around 115, 124 actually last year. And this year, we actually already added over 50 new customers. So because we we started a little bit different motion, we started a product led motion this year. So because before this year, you couldn't buy Keboola, you know, on the Internet. We were just growing by referrals and contract.

Nathan Latka

03:08So, Pavel, just be clear, you have about a 175 customers today Yes. From a 124 a year ago.

Pavel Dolezal

03:13>> Yeah. And as a customer, we define somebody who's paying, you know, not somebody who's using us for free, but who's paying.

Customer Segments and Pricing Tiers

Nathan Latka

03:19And and about how much do they pay per month on average?

Pavel Dolezal

03:22>> Well, it actually we split we split the the customers into enterprise, then we have SMBs. And in the SMBs, we also have growing startups. And then we have the pay as you go model, which is the product led, and that's just starting. So all those 50 average around 3,000 ARR. And then the SMBs, they would they would kinda, like, be somewhere between 50,000 to 250,000. And then we have couple of enterprises, and they are 350 north

03:51>> in ARR, not counting the services.

ARR and Monthly Revenue

Nathan Latka

03:55Sorry. I'm confused. So add it all up. How much MRR did you guys do last month?

Pavel Dolezal

03:59>> Last month, we we are now we are now actually doing 4.9 ARR, you know, on annualized basis. So divided by 12, it's kinda like something like 440 or something like that.

Pay-as-you-go Traction and Compute-Based Billing

Nathan Latka

04:12Yep. About $4.20, $4.30. Okay. Very interesting. And which segment is growing the fastest? Pay as you go, SMB, or enterprise?

Pavel Dolezal

04:19>> Well, it's actually for for us now, it's it's it's to it's the enterprise, and it's the pay as you go. And that's just you know, we started to concentrate on pay as you go, and that was really interesting because during the COVID, everybody told us you should actually open up the product led, you know, pay as you go promotion. And we're like, okay. Okay. We don't have time for it, but then we did. And in the

04:40>> first six months, we got 900 projects started. And in July, we got 260 projects started. And I'll just pay as they go?

Nathan Latka

04:48Is it is it based on number of minutes in the system? Or no. I know it's a credit card, but what's the utility value?

Pavel Dolezal

04:54>> Yeah. It's the number of minutes that the platform actually runs their jobs. So, you know, either you extract the data, whether you warehouse the data, whether you run the pipelines and, you know, like all the way from construction transformation to actually reverse ETL, It actually uses some compute time, which creates a job, so by number of minutes.

Nathan Latka

05:12Number of minutes per month. Interesting. Okay. Got it. So that makes a lot of sense. What's the team size look like today? How many people?

Team Size and Sales Hiring

Pavel Dolezal

05:21>> Well, actually, two months ago, we were 48 people. Since then, we started to actually hire more and more people in sales and marketing, which we didn't have before. So as of current, we are 56 people.

Nathan Latka

05:31And how many in sales?

Pavel Dolezal

05:33>> Well, that's actually a funny story. Last December, we had one person in sales, then we hired three people into sales in first in the first half of this year. And as of today, we actually we actually have 10 people as of August.

Nathan Latka

05:49And how many of those 10 carry a quota?

Pavel Dolezal

05:52>> All of them. But they are on you, so they're just starting.

Nathan Latka

05:55How do you set the quota for new reps? Mhmm.

Pavel Dolezal

05:58>> That's actually, we hired we hired a guy who to run the inside sales, and his name is Paul Dan Hake. And he actually came to us with the methodology and how to actually do it. And so it's based on both outbound and inbound, like levels. So he actually set the first levels in the first half of this year, finding out the process, how many outbound calls he can actually do, set up the demos. And based on

06:21>> that, you know, he set up the process for his reps that he is just hiring as of now.

Nathan Latka

06:27So what's the name of the person you hired?

Pavel Dolezal

06:29>> Sorry. Paul Paul Donaki.

Nathan Latka

06:31Paul Donaki. And where is he from?

Pavel Dolezal

06:34>> He's actually originally from Scotland, and he moved to Prague several years ago.

Nathan Latka

06:38What company did he come from?

Pavel Dolezal

06:40>> Oh, he actually he he came he came from Computer Associates, and then he was working for Rooncast, which is another SaaS startup.

Nathan Latka

06:48Got it. So he's like your VP of sales, and he's now hiring new reps? Yeah. I see. Interesting. Okay. So you're not maybe but you don't have them on a quota yet. You're still trying to figure that out?

Pavel Dolezal

06:58>> Yeah. Yeah. Exactly. Yeah.

Nathan Latka

06:59Okay. Why did you hire 10 right off the bat? Why not experiment two or three?

Pavel Dolezal

07:03>> We actually did experiment. So we we well, all 10 are not in inside sales. So there are some people in enterprise sales as well. But we actually hired first we actually hired for the first poll, then we hired the second rep. We saw how they were ramping up and how it worked together with the pay as you go model. So upselling and doing outbound as well. And when after first two months, actually, both of them were

07:27>> doing the numbers of outbound and the actually the the contacts progress to high pipeline, then we actually then we actually say, well, there is no time to wait, and we should really start scaling this, you know, faster than we were previously. Because until last year, we we pretty much didn't have sales. You know, we we were experimenting, now once here, we would have one person. You know, we have two people in Chicago or then three people

07:53>> for some time, but we were just experimenting with that. But most of our growth look like?

Nathan Latka

07:57You're at $420,000 a month today in revenue. Where were you a year ago?

Revenue History and COVID Impact

Pavel Dolezal

08:02>> A year a year ago, we actually we were we were in in 2000 in 2020, we actually ended four seven. 2019, we actually ended 4.1. And 2018, we actually ended 2.4. So we were

Nathan Latka

08:23Pavel, you were what?

Pavel Dolezal

08:25>> Sorry. No. I I said that we are we were growing you know, like, 2018, 2019, we're growing about sixty percent. But then the COVID year, like we got some we got some we got some people actually, like, little a little bit down. There was some COVID effect, especially in the hospitality and the enterprise, and then, like, we started to grow again.

Nathan Latka

08:43Yep. Yep. Okay. Got it. So 4.9 now, four point seven a year ago, 4.1 before that, two point four million in 2018, and that's all up from an agency that was doing $400k in sales in 2015.

Pavel Dolezal

08:53>> Yep. Exactly.

Nathan Latka

08:53Did you

08:54guys bootstrap this or raise capital?

Bootstrapped from the Start

Pavel Dolezal

08:56>> No. It's all bootstrapped until now. Yeah.

Nathan Latka

08:59We love that. Nice work, man. Congratulations.

Pavel Dolezal

09:02>> Yeah. It's a team.

Nathan Latka

09:03What's the toughest thing about doing about bootstrapping something like this?

Pavel Dolezal

09:07>> You know, for us, it was actually a choice, you know, when we started because we saw that we were a little bit ahead of the market. So we're like, hey, we actually need to experiment with this. We need to see how to do it. And we had customers who paid us. So we were creating a mini brand in the Central And Eastern Europe and customers were totally happy. The toughest thing with that is But I think

09:30>> it's actually embedded, especially in the beginning. You have to really juggle your resources, right? So you can't do five different experiments. But to be honest, when you are small, you cannot do five different experiments because your organization is not really set up for. If you do five, you cannot really devote attention to it. So you have to be very you know, you have to be very precise and very diligent in what you select to do.

Engineering Team and Community Marketplace

Nathan Latka

09:56Oh, it makes sense. And, obviously, your engineering team has a limited resource. Right? You can only build so many products so fast. How many engineers do you have today?

Pavel Dolezal

10:04>> We have twenty eight twenty eight engineers and plus 400 actually engineers in our marketplace because we set up from the beginning as a platform. So we are not building, you know, the connectors to data or or actually or writers to systems. And most of that is built by community. So there was there's actually 1,400 apps in our marketplace, which was created by 400 different developers. And that's you know, the community is part we actually love a

Nathan Latka

10:30>> lot. How

10:30How did you convince 400 engineers to build 1,400 apps in your marketplace? Like, how do they make money? Why is it worth their time?

Pavel Dolezal

10:36>> Well, they actually there are there are two reasons. First, like, I would say, like, a lot of them are are from our partners who are actually doing implementation of Keboola and stuff. And sometimes they would need something and they would just like, it's our philosophy. Like you shouldn't wait for us, right? To put it on the roadmap. We do the core system, the platform. So when they wanted something like special connector to Teradata, which they didn't

11:02>> like our default, so they would create that for their customers, right, and open source it. And then the second part, which actually is really interesting, people inside the companies actually create their own applications for internal use. So that's how they productize the data because we see that data is not analytics only. Analytics is kinda like the step, right? You want to look at the data, but then it's about the actions that you do with the data.

11:31>> How do you write it into the places where you consume data, like CRM, Intercom, everything? And how do you automate the use cases like Customer three sixty and stuff like that? So once they start doing that, they start actually write data into systems. They actually put that in production and created new apps.

Churn and Net Dollar Retention

Nathan Latka

11:50Yep. Okay. That makes sense. Got it. So it's helping them build their own company. Maybe they run an agency. Their customers need it, they build the integration. Are they sticky, Pavel? These customers, what's the churn look like?

Pavel Dolezal

12:00>> Yeah, it's actually really interesting, you know, like until the last year, we pretty much didn't know, you know, like the churn. So it was actually very, very good. And last year, we actually Until last year, we had eight to 10. And last year, there was like twenty one percent in the base of customers who either went bankrupt or totally scaled down their businesses or stopped for a bit of the year. Some of them, I would say,

12:29>> like, thirty percent actually came back during last year, but, you know, some of them went out of the business. If you were a restaurant business in US and you had 15, you know, like, locations, COVID year hit you really bad.

Nathan Latka

12:41Oh, you're talking twenty percent churn last year. Is that right?

Pavel Dolezal

12:44>> Yep. Yep.

Nathan Latka

12:45Do you have

Pavel Dolezal

12:46>> In in the in the logo in the logos, I mean. Yeah.

Nathan Latka

12:49What about the revenue?

Pavel Dolezal

12:51>> Yeah. The revenue, actually, the revenue was pretty good. We actually expanded, you know, the the the revenue as well. So net retention rate, you know, in dollars was actually 2019 was 119, and 2020 was 105%. Already now, we are in 111%, so, like, 11% on top this year.

Nathan Latka

13:14That's great. Yeah. So if you churn 20%, you expand 31%. Yeah. So from a net perspective, you're 111%.

Pavel Dolezal

13:21>> Yeah.

Nathan Latka

13:21That's really great. How are you getting new customers?

Customer Acquisition and Referral Motion

Pavel Dolezal

13:24>> Well, it was until until last year was mostly referrals. People would know us. They would use us somewhere. They would go somewhere. They would take us or they would recommend something like we have a customer, Tomas Cupr, who is like super rock star in like he he built Rohlik Group, which is a billion dollar company out of Czech Republic. They do groceries, deliveries within two hours. And it is actually his third venture where he took

13:50>> us. Right? So people take us with them. And during the COVID, we saw like how the world is changing. So we say, hey, let's accelerate that. You know, now is the time. You know, we have proven the product. People are happy with us. Now is the time to actually accelerate.

Nathan Latka

14:07Yep. Yep. That makes a lot of sense. Alright. What's next for the product? You guys are you planning to stay bootstrapped? Are you planning to raise capital or what?

Pavel Dolezal

14:14>> Well, next for the product from the product perspective, we are actually coming with with some new features for more for the developers, you know, within DevOps kind of like pipelines. But from the company perspective,

14:27>> we are actually thinking what to do next because like we have now, we have cash, we have for foreseeable months and we are generating more and more money. So we'll see how it turns out next six months, to be honest. You know, we we got approached by a lot of people, but, you know, but until now, we were comfortable with bootstrapping. If we see that we can deploy more capital than we actually have, you know, for

14:52>> market for operations, we'll think about it. Yeah.

Profitability and Decision to Reinvest

Nathan Latka

14:54Yep. Of of the $420,000 in monthly recurring revenue that you do, how much goes to the bottom line each month?

Pavel Dolezal

15:00>> Mhmm. So we we if you if you can say bottom line, you mean, like, all the expenses or The cost. Yeah. Okay. So we actually until last year, end of last year, we were profitable, like and we had like 600,000 profit. And we started when we started hiring all those new people in June, July, we actually made the decision that we will go within the next six months, we'll we'll not be profitable and reinvest all of

15:28>> that because we were hoarding the cash from last year. So as of now, like, we we are minus, but it's it's it's something that we made by decision to invest. Yeah.

Nathan Latka

15:38Makes a lot of sense, Pavel. Let's wrap up here with Famous Five. Number one, what's your favorite book?

Pavel Dolezal

15:43>> Well, a part of the, you know, like the normal ones, you know, you would say, actually, like, Sam Walton's Made in America or the, you know, book from the guys that made Aldi because that's really, you know, like, people who made the business from the bottom up into large, large scales.

Nathan Latka

15:58Two, is there a founder you're following or studying?

Pavel Dolezal

16:00>> Yeah. I was thinking about actually, I do found actually, I do follow a lot of founders that, you know, like, lately, you know, the guys from Fast, you know, thecom are really interesting, and I like a lot of new people actually who started who started things about the Bitcoin. But, you know, like, one of the people who are never never, you know, like, never never stops amazing me is Jack Dorsey, you know, from what he's doing,

16:22>> like, so many different ideas. I I really love it.

Nathan Latka

16:25Number three, is there what's your favorite online tool for building the business?

Pavel Dolezal

16:29>> Yeah. Actually, it's it's the instant messages, I would say, and the data looker, you know, up to now.

Nathan Latka

16:34Yep. Looker's good. Number four, how many hours of sleep do you get?

Pavel Dolezal

16:38>> Seven to eight. I cannot do less for longer

Nathan Latka

16:40And periods of what's your situation, Pavel? Married, single, kids?

Pavel Dolezal

16:44>> I'm married. I have three kids, yeah.

Nathan Latka

16:46Three kids. And how old are you?

Pavel Dolezal

16:49>> They are 10, 12, 13.

Nathan Latka

16:50No. No. You.

Pavel Dolezal

16:51>> Oh, me. I'm 45.

16:53>> 45.

Nathan Latka

16:54Last question. What's something you wish you knew when you were 20?

Pavel Dolezal

16:58>> Life goes really fast, know, like older you get, you know, like, just like enjoy it every day.

Nathan Latka

17:04Guys, Keboola launched in 2011. They were an agency that did $400 in sales in 2015. Pavel came in and said, guys, there's a product here. Let's launch it. They spun it out in 2015, did 2,400,000 in sales in 2018, now at a $4,900,000 run rate. Really healthy growth, doing almost $420k a month in revenue. Very profitable. A 175 customers that have on average 2 or $3 per month for, again, this developer tool to help developers access

17:27their data faster and dashboarding. Again, all bootstrapped, 56 on the team, 20 engineers, 10 sales reps. Most of those guys knew as they figure out their sales motion. Pavel, thanks for taking us to the top.

Pavel Dolezal

17:38>> Thank you, Nathan. Have a great day.

Nathan Latka

17:41One 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, 1PM

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19:15I'll be in the comments. See you.