How Logz CEO Tomer Levy grew Logz to $48M revenue and 800 customers in 2024.

hello everybody my guest today is Tomer levy he's the CEO and co-founder of a company called logs dot IO before founding this company he co-founded whatwhat and was the CTO of another company called antigua a company that developed innovative docker like containers designed for large enterprises prior to antigua tomar spent six years at checkpoint where he let its an intrusion prevention system or IPS product from concept to market generating 100 million dollars in revenue and in the second year alone toma was an MBA from tel aviv university and it had an has a BA in computer science and is an enthusiastic kite surfer toma are you ready to take it to the top yes I am all right very good so let's just jump right into your two logs dot IO your current company what does it do and what's your revenue model sure we're a log analytics company we help customers like dine turn media British Airways analyzed data generated from machines if you think about it every machine in your room from your computer to your mobile phone to even your house generates a software that generates logs we had companies analyze this log data and basically reduce the time we take to solve problems in their web servers in the databases this is kind of the main the main product that we offer our business as you ask is is basically selling software service to analyze its data yep and are you so we are you selling like two IT folks or CTO at companies yes usually it would be s sorry DevOps IT operation this is I would say most of our customers about a quarter of our customers are actually security teams that also need to monitor log files might or log events and kind of correlate to understand threats and attacks and what would you say on average just so we can get a sense of kind of deal size here what's the average customer paying you either per month or per year whatever is easiest for you as you get this answer often it's complicated it starts with B this with the I would say the self-service tier which usually people buy online paying a few hundred bucks a month let that be a few thousand dollars a year on top of it we have two main courts one them is the SMB usually would pay about 10k 10 to 15 K a year for the product and on top of it we have what we call SME small medium enterprise would usually pay 50k per year minimum and then would go to a few hundred KS for the for the high-end enterprises what do you look at your sweet spot though I mean are so is it fair to put a range on it's fair to say you know between 10 and and and 40k and annual contract value I mean is that think about the last few deals you've closed I've kind of been in that range yes yeah I would say as we've all we're very young companies so all right when do you launch company we launch it on on 2014 we we launch the company we launch the product into end of 2015 so we're about a year and a half in the market today so what if you look at the last 10 dealers probably around 40k yeah and are you is your process on those folks you if you have an inside sales team there or no yes so what we do very differently for most companies at least in our space is we focused on open source so we're actually a large part of what we offer is actually an open source platform called ALK elk often-used so just you just said elk has about about half a million downloads a month what is this so I like for a non-technical person described that to me so think about it like a set of libraries you install them on a server and they basically take all the data any data you have it can be what application it could be daily about a credit card swiping your e-commerce it doesn't matter you put it into this one bucket and what elk it allows you to do is it's basically visualize the data and understand what's important in it what we do is we offer that in the cloud with more capabilities so I'm going back to your question about kind of the way our business works is is really based on the open source community so we seek today many companies you know thousands of new companies sign up to a platform every quarter and start the process start to use a platform and this is kind of the main driver to the business this is how they we actually get our initial knowledge did you intentionally launch this open source project with the neither know-how that one day you would use it as lead generation for a paid product so unfortunately we're not the one who actually developed the open-source from the beginning it was actually developed by different folks and they I spend most at the time kind of investing in the core search engine this the elk is I would say very strong search engine what we've built on top of the core open source we've built I would say an application a solution for specifically for log management so customers instead of them trying to install maintain it's really hard it takes a lot of time and effort they kind of get that SSS from us in the cloud and and unfortunately we didn't invent that so is a good way to think of elk for a non-technical person it's basically like Google search for all your log data perfect yes got it and then what you're doing is making management of those logs easier way more robust than just a search with your new platform exactly how do you make so this is an issue in question because this is a growth the channel that other people could use kind of the open source two paid model but since you didn't create the open source software like how do you make sure you're the one getting leads right when people go use that for free yeah that's that's actually increasing discussion and and and we're not the only one doing something called open says it's open source as assess who are some others just name one or two you can think about you can think about Pantheon they do a wordpress as a service you can think about you know they're probably a cloud their eyes is kind of in this market but they'd s'more on-prem Hortonworks and others so what's the label you gave them what was it called open says open source as a service yes interesting but it's free usually I mean it has to be free if you sell it as a service it's hard to do it for free so meteor think about github right github just offered the get open source as a service obviously github offers more capabilities if you're developers it's a great platform in the same sense we offer first the open source and then start to pile on more capabilities machine learning and some more advanced stuff so so yeah that that's kind of in a nutshell and the way we get leads and how do I make sure that we are dominant in that space is a lot of content so we've been writing content before just as we launched the company we started writing content today we would with a number one contributor of content to the ELCA community so if you search Google for LK or AWS Alka in production we're number one in Google and all of these searches and we're contributing a lot to the community and also getting obviously traction and leads from these articles so someone else wanted to do this what you would do is go find a relevant to open source community right for whatever your product is and make sure you're the one contributing the most free value to that community so that when someone wants to a more advanced version they find you naturally exactly and I would add one more thing and this is very delicate for open source the open source has to be good enough to get started good enough easy to get started and use it so it will have mass distribution but it has to get to a point where it's hard to scale it it hard to make it production grain and this is where commercial companies has a lot have a lot of leverage because otherwise people just keep making open source stuff ever copy yeah say so we're you - how many customers are you serving today so we have today about one in you know just again one half years in the market we have about a thousand companies from 80 different country to choose logs a few hundred of them are paying customers a few hundred of them are free users of our power coming all like like 300 page something like that I'll keep that one private but a few hundreds okay good and then walk me through kind of this story from a financial perspective did you decide to bootstrap this or be raised capital so we actually had we had to make a decision very early on we raised money but we could have built a lifestyle business out of this company very easily because we had traction de0 we made a decision we want to build something big giving our experience in the past we already build companies so we raised twenty four million dollars in these two and a half years the last round was in October we raised the 15.6 million dollars of 2016 yes got it got it and what's the team size today or 77070 and you said I always love this because got a huge debate on a show a few days ago of this guy that said Nathan we have 10,000 customers and later on the episode I did the math and it didn't check out and I said what happened he goes oh well these aren't paying customers I'm like well what the hell is a customer if they're not paying like call them a free trial right he's like no we like to call them a customer because it's a it's a mode of thinking and it's how we should think I said you're less and you're full of [��__��] basically these...