How Merge CEO Gil Feig grew to $20.8M revenue and 160 customers in 2024.

hello everyone my guest today is gil feike he's the co-founder of merge now previously he was the head of engineering at canvas he's led progress of projects at wellfront and linkedin and he's going to graduate a graduate of the cumberland university he now lives and works in san francisco bill you ready to take us to the top yeah let's do it all right real quick so talk to me a little bit first uh when you leave an engineering role at a company it either means your your equity is you know vested and you're good going on a new thing or you got bored and just wanted to leave which one was it um i think i've always wanted to start a company and the timing was right the problem was there you know canvas was a great place but the timing was ready and i always wanted to do it so i decided to make the lead so talk to me about the current product you're building and ideally tie into the discovery of the problem via your director of engineering role at canvas yeah absolutely so uh what we're building here are unified apis and so you integrate once with us and then you can offer your customers 20 30 40 different integrations in hr applicant tracking accounting and then more categories on the way uh and we we came to this idea me and my co-founder after experiencing this exact problem at both of our past companies so my co-founder shenzi was you know had chief of staff to the ceo at expanse the cyber security company and they had to build out a ton of ticketing integrations she saw it from the business side and then you know as leading an engineering team 15 people i was spending my nights and weekends working on these integrations because it was just so much work there was a lot of support they were constantly breaking and so when we realized that we both had this problem in two very different spaces but a very similar problem we did a lot of research nice weekends and found this spam so many b2b categories and so we decided to launch merge which is a platform for unified apis in the b2b space what year was that so we we started merge last year uh so it's been about about a year and a month since we started the company and have you been able to take down that first paying customer or still pre-revenue no yeah we have several paying customers live in production we're we're powering some pretty uh business critical functions now so it's been it's been really cool to see adoption so so what do you look at in terms of you sign up a new customer you need them to do x y and z in terms of activation metrics to get them addicted is it like number of api calls per day or what's the metric yeah so what we're really looking for is for someone just to embed us within their platform so we kind of provide that you know as you describe that plaid style linking flow at the beginning where the customers go through and they link their account it's really simple it takes 30 minutes for someone to embed that and then they just add our sdk to their backend and they can start exchanging all that data with us so we consider the point of activation to be the point when they've made that first back-end exchange of data and link their first either customer or test account so like if we were going to use you at founder path because we rely on a lot of integrations could i do this knowing nothing about tech or would my cto need to do this with a javascript embed or something similar got it yeah so we are aimed towards developers we're built for developers that's the whole experience is shaped around that we make it really easy to just add those platforms with our sdks but yeah it is always going to be an engineer who abouts us god and and what's your first guess here what pricing is going to work what are these couple of customers paying per month on average yeah so so it really depends um we don't you know we're not we're not it really varies from customer to customer but uh we we offer our pay as you go plan so it's one cent per api request um and then we offer a flat rate plan and that's really focused around the the level of support that enterprises need um or even even mid market you know when you need custom onboarding sometimes these integrations you're going to have situations where someone has a really custom instance set up and we're there to support along the way and that's when we we do a fixed rate plan and what would that look like if i didn't want mobs my cto to do this and i would just pay you guys to get the setup done what would i pay you what's maybe a range got it yeah so so we don't uh we don't actually build it out for you that's just a flat rate plan that doesn't vary based on usage um and again it really it it varies a lot based on what your predicted usage is for the year but that's how we kind of get you that flat rate um and our goal always is to be significantly cheaper than the cost of an engineer um and you know that that will save a lot of time as well give me a guild though give me sort of a range i know you're experimenting i mean are we talking like a hundred bucks a month here these customers are doing like 100 grand a month i mean what's sort of the range of where your pricing comes in at yeah yeah it'd be closer to the former so it's you know again it really varies but it's on the order of a couple grand a month for our enterprise plan um or it's not quite enterprise it's more of like a plan where you require support and customer onboarding so really if you're you know a b2b company starting to onboard really legitimate customers that's when you might consider moving to something like that and have you successfully upgraded any of these initial customers to that thousand dollar a month price point or no that's sort of the next oh yeah many oh great okay take me back to customer one this is always tough for founders who are they how'd you find them yeah so it was it was kind of i would say our first five to six customers onboarded at all around the same time um and it really was word of mouth at the beginning ultimately we started using a lot of marketing we go for virality with a lot of things like that we're really big on social and all of our you know if we if we build a new integration it auto-generates all of our marketing content and posts it across social um so so we're really going that way and that's resulted in a lot of our later customers coming in uh but yeah early ones were some friends then that spread through word of mouth to non you know non-friends now i would say we're quite close with all of our customers we're all especially our early ones um and then we we really we did kind of view them as design partners but we also know that integrations are business critical so there wasn't a lot of room to really make mistakes so it was sort of like uh you know they give us feedback but we made sure that things were perfect before ever launching things yeah now this is always an interesting question too i mean did you do some early consulting before you fully developed the actual productized version of this last year or no you went straight for this ask revenue oh yeah no we we went straight for the stats revenue uh we were fortunate enough to fundraise early and we spent six months just building up the platform um we didn't have a single integration and then in january alone we added 20 integrations because all of what we built is around being able to really quickly add integrations but also keep them up to date make sure that nothing breaks um we did have an api break on on a sunday at 3 a.m because they had you know a breaking change that they released automatically and it broke hundreds of companies integrations with them unfortunately our on-call got paged and our postmortem says it was fixed by 306 a.m so we're pretty proud that we can we can react really quickly as well and not expose any downtime or issues to our customers how many total integrations do you have today i believe currently we have around 45 to 50. we add like i would say probably about two to three a week and we're going to continue increasing the rate that we're adding them and is that just a function of you hiring more engineers to build this out yeah so fortunately engineers we engineers and non-engineers are able to build integrations here because of a lot of the tooling we've built we've made it really easy again for us to move quite quickly when we add new integrations but yeah that with the toilet that we built is internal um and that's what what you know we could again we can hire a team like in miami to go out and build out those integrations um or anywhere so couple couple customers early customers last year how many customers right now serving today yeah so so we're not we're not publicly sharing all those numbers just yet um but we will be coming out more we do currently have 280 customers on the platform um and that's been going up quite rapidly so it's been customers or users so we have we have 280 uh organizations that have signed up for the platform um and then order of i have to i don't have the latest number on me but 40 to 50 fully embedded and more and more adding yep and when they're fully embedded that means they're paying or no you still have to convert them from fully embedded to actually paying you yeah so that means they're that means they're paying some are paid as you know and some are contract based gil that's congratulations i mean under 24 months going from sort of nothing to 280 sign ups and 40 to 50 paid that's great yeah it's really it's been really exciting and demand has exceeded what we've expected it's actually been really interesting too because since we launched so many companies as you know the space the whole the whole world is crazy right now but since we've launched so many companies have come out in this space and just needed us right off the bat so we're working with everywhere everything from public companies down to pre-funded companies uh vast majority in the like c to series c range and then some in the public range you raised early on how much did you raise and why yeah so we raised four and a half million from nea with scott sandell joining our board last year yeah that was last year and we we decided you know we needed that amount of money and it was largely based off what we were going to have to do to accomplish our goals which is building again a platform that's going to allow us to iterate really quickly on integrations we've never lost a customer to not having an integration and we promise free two to three week turnaround on new integration so um we're because of that it did again take a lot of upfront investment a lot of time to build out that tooling in that platform but now you know we've kind of achieved our vision i would say and there's a lot more to go but we've achieved our vision and we can just iterate so quickly gail most most founders in seed stage like this especially this size are selling you know 15 to 20 percent of business did your term sort of come in that range as well sorry uh what did you say yeah most founders doing a seed you know stage you know 4.5 million are selling 15 to 20 percent of the business i mean did you sort of come in that same range yeah it wasn't that ballpark okay and convertible or priced priced right whoa that's that's interesting how do you come with the price of price valuation when you have your pre you know almost free revenue yeah i mean this is what we wanted my co-founder was you know really really insistent on doing a priced round and um i i agreed and so we just we decided we wanted to go that route why is that i mean is there a strategy there why do why do you want a price round yeah i think just the uncertainty of a note we just we just didn't want to end up in a situation where we were you know kind of screwing ourselves over interesting are you would you recommend your other founder friends launching companies to only do price seeds or do you would you still work on convertible notes with the cap i mean i i think there's like pros and cons to both right it's really easy to just get a convertible note done if there's not too many terms you can move really quickly um for us our price round was a lot of legal it was a lot of time but ultimately we're really happy with it and we have no regrets what's your team size today how many folks yeah so we're currently 12 full-time um and then we have we have year-round interns as well that have become part of the team and they contribute quite a lot highly recommend that for early early startups you pay them are these free oh no of course we pay them we pay we pay them all we're not just yeah you're not an evil free intern founder we're not evil enough all right how many engineers um we are currently so it's interesting we're currently five full-time engineers but 10 of us can code so 10 out of 12 are coders my co-founder was computer science but went into finance she's now a full stack engineer and truly incredible six months full stack engineer and then our designer also an engineer also was in finance also an accounting guru but also an incredible designer he's designed everything you can see on our site um so yeah we really are picking rock stars we have an awesome team have you spent any money on sort of paid marketing yet or it's all just organic word of mouth all organic all word of mouth um i think we ran like a 200 trial on paid marketing um and we decided we were going to hold off until we have a full-time marketer which we hired um so we're excited about him as well i want to move into product there's a lot of other companies in space whether it's flat file attacking it or zapier more for the marketer that's trying to do this and you're sort of for the engineer but before we get into that real quick i always like to i always like to ask this question how long do you think it'll take you to break a million dollar run rate uh end of the year by the end of the year but he'll feel very good about that we feel very good about that okay very cool i would ask you what your growth rate was from last year this year but it's gonna be massive because we're talking small numbers here right i mean all revenue started in the past two months we came out of stealth two and a half to three months ago oh wow okay that's a okay good so you think you'll go from nothing to a million eighty three thousand dollars a month in this december yes that's great very cool so let's talk tactics real quick you know snowflakes ipo was massive and a lot of people said you know what snowflake actually is in a sas company they actually priced it purely off this usage metric you're sort of doing this interesting test right now where we have you know one cent per api call but also like a flat fee do you see a world where you're moving only into one of those in other words more more like snowflake where you're only charging that usage fee and is sas gonna become irrelevant down the road yeah i know i think we're always gonna have two models it's just unrealistic to expect a really small even pre-funded or like early seed startup to front so much money for integrations when they might only onboard one or two customers they really want to validate and so what we don't view that as like we again we view that that as pre-sales um and it really is a way for someone to kind of evaluate and onboard so ultimately yes we do want to convert everyone to a fixed flat rate we also want to give them the certainty like we found that customers like that they like the certainty we don't have a limit we can just onboard as many customers as we want sync the data as often as we want we don't have concerns around it and we are also you know experimenting with it uh with the the one cent for api request pricing model but there always will be a usage-based pricing as well yeah and how many api requests are you processing per month right now oh that's an interesting question um i can tell you since launch it's been it's been hundreds of millions i would have to get you a more accurate number on that is it i mean that is your key growth metric right i mean imagine you look at that pretty frequently yeah it is a key growth metric um we do you know if say someone's onboarding and they're on you know like an enterprise plan will compete while they're figuring it out you know a lot of things like that but um overall yeah that is a key growth metric we are going to start moving towards instead of api requests because it can be kind of unpredictable certain platforms might require you to make tons we're going to be moving to more towards a flat rate uh so you so you don't have to worry about like the nuances of one platform requiring more api requests than a different platform interesting okay and and then let's the other thing i want to chat about right let's talk about sort of legacy players in this base right so flat files interesting they're raising a lot of money very quickly basically saying listen if you rely on data from your customers and a csv upload like use this to quickly do it to map data you're saying hey if your customers don't have a csv upload just use our api integrator let them connect directly to the api how do you think about yourself compared to flat file so we are actually very close with flat file we are a customer and their csv upload is embedded within our platform so when customers are going through that linking flow they can actually come in and you know select from the different ats platforms or hr platforms and then the last one is csv so that if someone has an internal platform or they don't have api access some platforms charge for it they don't want to pay for it they can ultimately just export a csv upload it with us we still we use flat file to do all the sanitization and normalization or not normalization sanitization and then we pump that to our back end to normalize and it appears just as another integration called csv that's very cool well guys we're big fans of flat file they love this show i said you got to give me and my listeners a great discount to try a flat file if you guys want to take advantage of that and go to nathanwacka.com forward slash flat file gill pivoting here so how do you think about the more sort of marketer friendly tools in this space like sort of zapier yeah so so those platforms we don't we don't think of as like competitors we don't we don't view them as similar products we don't really run against them in a sales process so those those platforms are really good for connecting we say those are horizontal integrations they're they like to connect disparate systems so something happened on salesforce notify the sales team on slack whereas we are so sorry so those two are vertical agnostic we are vertical specific so we make sense of the data and normalize it into a single format so if you wanted to accomplish something like adding 30 ats integrations or 30 hris integrations to your customers your customer would ultimately need to buy zapier or tray or workato and then go and build out each of those 30 integrations and it's ultimately just moving from code to a ui and so engineers actually prefer to just code um so so we we generally don't run up against those ones they also just don't go as deep with the data you know we're really covering everything that apis cover and even if we don't normalize something with merge we have we have uh tools that you can use to make it so that anything that's possible with a native api building directly you can do with merge so if you succeed you're making tray and work auto irrelevant i i think that that's like i think that you know it might be a little bit of overlap but overall it's just a different market and i don't think we're making them irrelevant in fact we also use one of those platforms for a different function internally that we you know for piping salesforce metrics essentially interesting and then uh interesting and so so how would i think about this right at founder path we rely on finch data for payroll count uh finch obviously allows us to just embed it and then our users can connect to like gusto or any of those platforms you were basically saying nathan if you replace that finch integration with merge merge directly talks to gusto and bamboo hr and adp and all those things so there's no need for finch is that accurate exactly yeah and we're all api based only so we're built from enterprise from the ground up we're built to scale up to enterprises so all api based no scraping we're not doing things like that and then again a lot of the management tools as these issues come in um actually for reference at jumpstart we would have sorry now canvas we would have issues come in and i would go into my spreadsheet and take a day off of engineering days for each issue because it was a context switch they had to dive deep into the logs figure things out so all the tooling we built is to help manage that customer success can handle customer issues not engineering interesting very cool okay last question obviously when you're launching a company one of the hardest conversation is founder equity there's two of you guys how'd you have the conversation oh shenzi and i have been best friends since college it was an easy answer we respect each other massively we worked together forever we did an equal split and we're really proud of that so got so now you each own like 40 or 37 37 and scott and nea have caught like 10 to 15 he's the tiebreaker huh yeah it's something like that what was your guys's last disagreement not with scott but u2 as co-founders made a product decision oh this is so interesting i think yeah i don't know if i can think of our last disagreement we we're i would say we get along on a lot of things i would say we occasionally disagree on like certain factors but ultimately we're very good at deciding who cares more about a specific issue after maybe a short argument so um i would say there's been nothing that's so memorable that i could bring it up do you know what i mean and that makes that make sense yeah let's wrap up with the famous five number one favorite book oh favorite book oh my god this is a tough question i would say honestly it's a lot of the the silicon valley books more recently like i really love secrets of sand hill road recently yep number two is there a ceo or founder you're following or studying the a founder that we're what a founder you're personally following or studying oh um yeah many let me think here we really respect the founders of plaid so yeah i would say them both of them number three what's your favorite online tool for building a business besides your own for building we love full story is that a good one number four how many hours of sleep to eat every night um we think sleep is incredibly critical i aim for at least five but usually go for six to seven at least gail come on you if you think sleeps critical you gotta be getting seven eight nine right depends on the week fair enough fair enough how old are you how old am i i'm 28. 28 last question oh actually what situation married single kids i imagine single right i'm single yeah okay no kids uh last question what's something you wish you knew when you were 20. um take time to to enjoy and learn your job early on i think that like i was always in a rush to move on to the next better thing and i think i should always be spending time living in the moment guys there you have it merge dot dev again integrate fast integrate once it's sort of one api for hr payroll recruiting accounting platforms they just launched their paid plans two months ago already call up sort of 40 to 50 customers paying sort of 500 to over a thousand dollars a month they think they are on track to break a million dollars in ar by the end of the year we'll see what happens gil thanks for taking us to the top thank you so much one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we 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