How Octopai CEO Amnon Drori grew Octopai to $6.7M revenue and 36 customers in 2024.

hello everyone my guest today is amnon rory he is the ceo and co-founder of octopi a leader in metadata management automation for business intelligence with over 20 years of experience in technology companies before co-founding octopi of non-led sales efforts at companies like panaya zen technologies modis novo and alvarion and also served as the chief revenue officer at kula data a big data behavioral analytics platform he studied management computer science at the open university of tel aviv i'm not are you ready to take it to the top sure absolutely all right what does octopi do and what's your revenue model how do you make money so octopi is a metadata management automation platform basically what it does it enables any organization to understand how the data moves around the different systems one of the biggest riddles for any organization is to understand how the data moves around what is the data movement process from one point to another how reports are showing the data and when the data is coming from so think of us like the google or ways of understanding how the data moves around within your organization replacing weeks if not months manual work in seconds with a click of a button so it's all internal it's not like going and managing public metadata it's all internal metadata right of any organization like insurance and banking and healthcare in any larger organization what they're trying to do is to understand how the hell the data landed on that report and can you trust the data that is in the report and they want to understand how does it flow and how do you is this a sas company pure play yes it's a sas company our product is on the cloud what do companies pay on average per month for the technology so uh if you if you're asking about a customer the customer pays few thousand dollars per month typically our customers either subscribe for a month a few months or a year or even more than that okay well obviously turns credit on a sas company so hopefully if they're signing up for a month they're staying longer than a month correct so this is why we enable customers to sign up for a month because there's a lot of promises out there to deliver uh agile technology and machine learning capabilities and people kind of trying to look at so many different tools what we're saying to them is uh start using the product if you don't like it you can stop but as i said we have customers who are using the product for many many years and i'm not when did you launch the company what year so we launched a company in 2015 we started our business in early 2017 and we're very very active uh since then okay and how many customers have you scaled to over the past couple years so we have a few dozens of clients uh hoping to get to the 100 this year okay when you say a few dozen you mean like 30 40 correct okay very good and i mean can we kind of back into revenue then if you have caught 36 customers at 3 000 bucks a month that would be about 100 grand per month right now in revenue something like that correct and where were you exactly a year ago so we were almost a third of that so we kind of tripled our business in sales both by revenue and number of clients last year we hoping to triple this year as well and i'm not how did you get your first 10 customers this space is obviously extremely competitive walk us through specifically how you got your first customer right right so this is one of the biggest challenge for any startup i think that the number one challenge is to create trust since our product goes to large organizations they even before considering money they want to consider choosing a trusted product so what we've done is before going to the u.s market in the western european market we tested the product right here in israel so this is how we gather our 10 15 clients in a variety of different industries once we understand what does it take to have the product that people can trust yeah i'm sorry i want to push i want to go deeper here so what is the name of the first customer you got oh um the actual name was cloud cloud was it is an insurance company and then came hale which is another insurance okay so let's stick with the insurance company how did you know that first customer i mean how did you open the relationship so we're very active uh in the data um i would say data analytics fields we uh lecture we talked a lot of our peers and prospects and once we started to talk about what we do uh we got attention what do you mean talk though like you were speaking at events or what right and there are uh very interesting forums about data management the accuracy how to deal with uh issues around analytics and not to mention one of the most key important things in our company is that my other two partners gal and itai have been leading uh bi groups and this is how the idea came from actually from them and then your first customers came from those groups right they were actually suffering from the same thing that all of our customers suffer but they decided to do something about it and created that product very good navi bootstrap the company are raised uh we bootstrapped for two years then we raised uh in total about 6.2 million dollars and this is where we active in uh you know advancing the product how how many people are on the team today um less than 40. okay about 40 and where's everyone based so we have the r d and innovation center based in israel and we have a sales office in new york okay so israel and new york that's great now with that money raised i assume you're burning capital to drive growth or are you at break even or profitable today so at this point of time the number one goal of the company is growth so even though uh so you're burning i'm not that's code for your burning money correct yeah got it how aggress help us understand how aggressive you're being so we talking like a hundred grand burned a month or a million i mean how aggressive um few hundreds of thousands of dollars yes okay and from you know as you're leading this company every ceo deals with this how much runway do you always like to keep keeping the bank so it's very it varies the first year we we didn't have too many sales so we were very careful with that but now as you generate sales then you know that certain income will arrive and this is where you get the capability to increase your burn rate uh furthermore we have a very good you know vcs who are looking at occupy and they encourage us to grow the company because at the end of the day this is a game of market share it's one thing to grow from one to two to three to five to seven to ten and it's one other thing to grow from one to four to ten to twenty so uh there is a market there is a there is a great product what we are focused on is growth understood what's your turn today um if i remember correctly we had one customer that left us last year so what's what's that mean in terms of revenue churn um few thousands of dollars a year no percentage-wise so we're talking like four percent oh no no it's uh one out of forty so do the math no no revenue churn not logo churn um logo turn will be 1 out of 40. yeah so i don't remember i think it's uh like two two like yeah like two percent revenue turn per year right right right are you guys not tracking churn so we are but we just closed last year uh our month ends at the end of january so we haven't calculated the annual the fiscal year for us and this is this the first year of renewals of all the deals that we made in 2017. but you said a lot of your things are on monthly accounts i mean surely you're looking at china on a monthly basis not just once a year when you close the year that's correct but it seems to be that even though our pricing is monthly most of our customers are enterprise customers so the way they look at this is from budget perspective and what they are doing is annual subscription not multi-subscription and so to get a new three thousand dollar a month customer what's your fully weighted calc look like um we don't calculate it at this point simply because the company is still uh on a penetration mode we think that we don't need to really look at this so far why would you not come on why would you not need to look at that though i mean you're especially if you're burning 200 300 grand a month yeah simply because at the end of the day it very much has to do with the amount of efforts that you do in order to get deal so um acquiring customers in the u.s is different than acquiring a customer for example in western europe and within western europe it's very much different from the one that you acquire either in the netherlands or in germany of course that's true for every sas company but most sas companies still calculate cac so we decided not to look at this at this point yeah but why not what if what if right now you're spending money acquiring customers and you're spending way too much to acquire them and you're throwing yourself into a major cash issue so we have quite a good understanding what is the process that it takes to acquire a customer yeah but no no if you did though you know what cac was yeah but at the end of the day the sales model maybe is a little bit different we sell remotely we sell over the phone since our product is hosted on the cloud so you can either calculate the amount of...