How Permit.io Raised $6M Seed to Build Full-Stack Permissions as a Service (Interview with CEO Or Weis)

Introduction and Or Weis Background

Nathan Latka

00:00Hey, folks. My guest today is Or Weis. He's the CEO and founder of permit.io and co maintainer and author of open source opal.ac. He's a serial entrepreneur who's passionate about developer tools, previously founding rookout.com, a leading production debugging solution and managing upwards Israel's largest founder's PLG community. Before becoming a founder, he worked as a lead engineer in multiple cybersecurity and big data companies, intelligence corporations, and as a consultant for the Ministry of Defense as a VP

00:25of r and d at Netline CT Cyber Division. Or, you ready to take us to the top?

Or Weis

00:30>> Yeah. I'm excited to be here. It's gonna be fun.

Nathan Latka

00:33You're one of these, like, super smart ex Israeli defense guys, Well,

Early Start in Software and IDF Service

Or Weis

00:40>> I try my best. I did get an early start. So I started working with software at the age of five, thanks to my bigger sister. And yeah, and I got to serve in the intelligence score in the IDF in 8200. And that's really kind of really a runway for acceleration that basically changed my life and is awesome.

Nathan Latka

01:04So what years, how old are you when you were in the IDF?

Or Weis

01:08>> So I was between 18 and two up to 24. So I served for slightly longer than than most.

01:19>> And I obviously, I started off just as a as a grunt and I moved my way up to be an officer and a team lead. But throughout most of my role, I was very hands on as kind of a software engineer, reverse engineer, etcetera, etcetera.

Nathan Latka

01:33So what were you doing? I mean, am I allowed to ask questions about what you did at 8,200?

Or Weis

01:38>> Yeah. You can ask about everything, but I'll have to kill you.

Role in IDF Unit 8200

Nathan Latka

01:40So Well, I don't wanna die. So is there anything you can share with me that wouldn't get me killed? Just to give us a sense of what you are working on.

Or Weis

01:48>> So actually, it's it's been more than seven years since my service, so I can be slightly more open about it, but I I obviously can't go into much detail. But I can tell you that I worked a lot in software engineering and cybersecurity. And I can tell you that I had the good fortune of working on projects that were critical for the security of both the state in Israel and other allied nations. I worked on a

02:16>> lot of cases that I described in other talks as working on high stacks and high stakes. For example, I had a situation where I was required to deploy software to production, but people told me you only have four attempts to get this right and if you fail, people would die. So not exactly CICD

02:39>> and obviously a lot of stakes. I also in that specific incident, I ended up running into a bug that kind of worked at our endeavors initially. And we really tore our minds to find where it is and it ended up being a vulnerability in Windows itself, in the operating system. And I think seven years later or so it was announced as a CVE, but before that it was unknown. So we both had to dive deep into

03:13>> the stack and also handle those high stakes. Those kinds of situations I think really taught me a lot about taking software to the edge, into the extreme cases and making the best out of it.

Nathan Latka

03:26Mhmm. I mean, just to be clear, I believe the 8,200 unit, you guys are that's a part of the the Israeli Intelligence Corp. It's also the largest and best known. And really, I mean, this would be the unit that if I'm making this up, okay, but this would be the unit if if another country was was trying to launch a cyber attack on Israel. You're this would be the group that's trying to prevent that cyber attack.

Or Weis

03:47>> Not just cyber attack. So eighty two hundred is essentially the equivalent of the NSA. It's just not a civilian body. It's a military entity, but otherwise, it's exactly the same. I even got to work a bit with the NSA as part of my service, which is cool. It's very interesting to see the differences between between the two. And what's unique about 8,200 is it it gets its first pick out of the draftees into the IDF, and

04:14>> it's fully independent. It's structured in a way, so if the entire IDF, if the entire state of Israel crumbles to dust, it should still be able to function on its own, and that also creates a lot of interesting mechanics within the organization.

Nathan Latka

04:29Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this, we've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

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05:17get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

05:39not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

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06:26if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. All right. Let's jump back

06:52into the interview. Yeah. Certainly deterrence. That would be that would even if you take us out, we still exist. I guess, last question. If if the prime minister of Israel is trying to send private communications to another country, you guys would also handle things like encryption of those messages and things of that nature. Right?

Or Weis

07:08>> That's a separate body. So, there's a so that's actually a difference from the NSA. The NSA is responsible both for securing the infrastructures and intelligence monitoring.

07:22>> The ISNU or eighty two hundred is only responsible for intelligence.

Nathan Latka

07:27I see. And and can in collecting intelligence?

Or Weis

07:30>> Yeah. Just basically, collecting intelligence in a lot of different ways, a lot of different spectrums, a lot of different texts, but just collecting intelligence, which is a lot of work by itself.

Nathan Latka

07:40I'm getting a sense I can't ask for you to give me an example of some intelligence you've collected and how you did it.

Or Weis

07:47>> Let's see. Maybe I can so there's also things that are kind of open that are as part of the unit. So part of it is something called OSINT, open source intelligence. So just having someone to comb the web, searching through articles, searching for information there, That's also part of the intelligence work done in that unit. But that's, I'd say, the least of it. A lot of things on the other spectrum, even if I told you, you'd

08:17>> probably think that I'm kind of reading from a science fiction story.

08:22>> And, yeah, I probably shouldn't go into those, but

Nathan Latka

08:24Alright. Let's go into permit.

Or Weis

08:26>> Think is it's probably that.

Nathan Latka

08:28Alright. Fair enough. And probably worse than anything I can think because that's what's required in today's world. But permit.io. So what are people paying you for? What's the company do?

What Permit.io Does and the Problem It Solves

Or Weis

08:36>> So it's very straightforward. We allow developers to bake permissions into their products in an easy fashion in a way in a way that it's future proof. So they only have to build it once. They don't have to constantly rebuild it. I got to that as in my previous company, Rookout, I ended up rebuilding access control for our product five times in a three year old company.

Nathan Latka

08:59Oh, jeez.

Or Weis

08:59>> And I

08:59>> was like, that's annoying. That's probably four times, if not five times too many. And, and we quickly realized that this is common for basically every product. You've seen these interfaces, these capabilities across the space a billion times. Things like user management with the ability to assign roles, API key management, approval flows, the ability to ask permissions from another user, audit logs, the ability to see who did what within the system, the ability for each of the

09:29>> tenants within the system to see that on their own, and invites and impersonation and emergency access. And you've seen all of these things a billion times and every time you saw them, some poor schlep of a developer had to build them from scratch. And what we're saying is very straightforward. Just like you don't want to build your authentication, just like you don't want to build billing, just like you don't want to build a database, there's no

09:52>> reason that you'll have to build authorization or permissions. So we provide them ready out of the box. You just plug them into your software as an SDK and microservice and you get interfaces on top both for yourself as a manager and developer and both for your customers that wanna work with your product. And unless you wanna sell something, you don't have to.

Target Market and Monetization Model

Nathan Latka

10:12This use case makes obviously tons of sense. Give me a sense of what you're targeting SMB mid market enterprise. What's the average customer paying per month right now to use the technology?

Or Weis

10:20>> So we're first of all, we're doing product led growth and bottom up. So everything is organic as people approach us. So we started with open source and a lot of companies find us through that. And we target the developers themselves. So it doesn't really matter if you're a developer in a tiny startup or if you're working as part of a team in a larger organization. You're facing really the same pain points and you need to adopt

10:46>> the technology in a very similar fashion.

Nathan Latka

10:47But what are they paying? We I get I totally understand the use case here, but I'm curious how you monetize.

Or Weis

10:52>> So we monetize through a usage based pricing model. So you pay as you go according to the amount of users that you authorize. So the more users you have, the more you pay. And through that, we really try to align with the top line of both sides. So when your business grows and caters to more customers, you're probably making more money and so we can share in that win win kind of situation.

Nathan Latka

11:14So what's the typical number of seats like a new customer might, like, start on day one with with permit? We're talking like five seats or like 5,000 seats?

Or Weis

11:22>> So it it really depends for so first of all, it's really important to indicate that these are not seats. So it's not the licenses for your developers. It's for your end users. It depends on how many end users you have as a as a company delivering a product. And we we see everything between several hundreds to tens of thousands at the moment.

Pricing Structure and Free Tier

Nathan Latka

11:42Okay. So several 100. I'm just playing with the slider on your pricing page. Several 100. So 5,000 monthly active users would be about a grand per month.

Or Weis

11:50>> Yeah. And, first of all, what we do have for, like, a thousand users, some thousand monthly active users that's still within our free quota, which is important to indicate. And, yeah. But, as you grow or as you move to other, other tiers because you need more features, yeah, you pay according to that pricing tier and slider.

Nathan Latka

12:11Okay. Fair enough. Give me more of the backstory here. What year did you launch the company in?

Company Origins and Bootstrapping Phase

Or Weis

12:16>> So we got started basically a year and a half ago. We bootstrapped for a year. So my co founder and I worked in garage mode, but not in a garage because I don't have a garage. And we initially started by working with design partners and just delivering the SaaS offering to them, kind of more a bit more handholding. Then as part of the service we built, we had a a

12:43>> microservice, a component that sync the application with the, the sorry, the authorization layer with the application itself. We decided to export that as an open source project. And that's what's called OPAL today, which you mentioned kind of in the opening brief. And while OPAL is very, very young project, it's not even a year old. It's already being used in production in amazing companies like Tesla, Zapier, Accenture, and others. And we have a very large community of

13:13>> developers in Slack

Nathan Latka

13:14on large? How many?

Or Weis

13:17>> We're getting close to 300 people on Slack.

Nathan Latka

13:20Okay. And and why is that? Like, I mean, I have a Slack group with 1,800 people in it, but 99% of them never say anything. So why do you use the number in Slack as a as the success metric?

Or Weis

13:30>> So it's not that you asked for the number. I said, what I was trying to emphasize is the amount of people that are engaging with the community that are asking questions. And those and you'd find several per day asking question.

Nathan Latka

13:45I see. I see. Got it. So 300 in the group, several actively engaging. How many I mean, isn't the right question with any open source project, how many developers have contributed at least one line of code in the past twelve months?

Or Weis

13:55>> No. So that's definitely a good indicator, but it's not necessarily the most important one because there's a difference between contributing and using. And it'll

Nathan Latka

14:03What's most important for you?

Open Source OPAL Project and Community

Or Weis

14:05>> For me, the using part. I see. Because because that the using and asking for features, that really teaches me on what the market needs and how the problem space looks and the details of it. So for example, when Tesla came in and they asked for more features and capabilities to take this to production, there was a shitload of information, pardon my French, that really got us to understand how this would look in greater scales and in

14:32>> more infrastructure complexity than we necessarily see ourselves with the smaller players.

Nathan Latka

14:36So how many Teslas are there today? How many installs?

Or Weis

14:39>> So it's not it's not installed on a Tesla. It's part of their fleet management solution.

Nathan Latka

14:44No. No. No. Or I'm asking as an example. How many companies like Tesla have installed an Instant Pro?

14:50Are you using the open source?

Or Weis

14:52>> Yeah. I'd say at least five that I know of. But since it's open source, maybe more.

Nathan Latka

14:58Okay. See.

Or Weis

14:59>> We don't have full visibility on who installs this. Just put the code online and anyone can take it.

SaaS Launch and Early Customer Pipeline

Nathan Latka

15:05So you're watching, I think this is super smart. You go from agency to open source to five like large companies like Tesla's app, you're installing the thing using it. You're learning from that feedback loop. Are you still pre revenue then today? You haven't you haven't started charging We've

Or Weis

15:19>> started some early revenue. So we launched our SaaS offering as kind of open to everyone as part of our announcement of coming out of Stealth a month ago. And we now have almost a we're getting close to a dozen customers heading to production.

Nathan Latka

15:35Okay. But does that mean does that mean they're paying?

Or Weis

15:37>> So that means that they're a step before paying.

Nathan Latka

15:40I see. Okay.

Or Weis

15:41>> But it doesn't have basically raised their hand and said, I'm willing to pay for these things, and you're saying, okay. We'll get you launched in sixty days.

15:46>> Some of them are large corporations, and they already sent us through procurement.

Nathan Latka

15:52See. I see.

Or Weis

15:53>> We questionnaires going through the compliance parts. Yeah. So, it's almost there and I'm actually kind of bewildered that we were able to do that in a bit over a month.

Nathan Latka

16:04But but so, yeah, again, generated revenue through some other things, some agency work, some custom work, you're learning through some of some of the, you know, things you're signing with these things. But your your but your pre well, your pre SaaS revenue today, you just launched it a month ago.

Or Weis

16:16>> Yeah. There's very early revenue from, like, the design partners, but that's

Nathan Latka

16:21Of course. Yeah. This is a very smart I think a lot of folks starting out, you, would say, are very experienced with startups. For those of you listening that are new to startups, like this whole idea of going and launching an agency and then signing up design partners who are prepaying for a roadmap and then turning the design partners into your first SaaS customers is like really a smart way to build a SaaS business. So it

16:42makes sense, the strategy here.

Or Weis

16:43>> Thank you. I'd like to emphasize that the agency play is not really an agency. Like, we don't charge them for the service or professional services, but it is a way to interact with them, professionally and learn from what what they need and get to product market fit. And then as a follow-up to that, to go to market fit.

Nathan Latka

17:03Yep. Now are you still bootstrapping today or have you raised capital?

Seed Round Details and SAFE Structure

Or Weis

17:06>> We've raised a 6,000,000 seed round in July.

Nathan Latka

17:10Okay. So last year, did a 6,000,000 seed. Fairly large I would say fairly large seed round even by today's standards for a pre revenue company, but your background probably I mean, it makes sense why you would get that. Did you price that round, or was that on a note?

Or Weis

17:23>> It was completely a safe.

Nathan Latka

17:25A safe. Okay. Uncap safe?

Or Weis

17:28>> No. It was it's a capped safe, but

Nathan Latka

17:31So how do you I guess, my question to you is most most pre seed rounds are right. Like, at a stage you were doing, it's gonna be a million dollar on a safe with a five cap. You obviously didn't do a 5,000,000 cap because you raised 6,000,000. So how do you come up with the right cap?

Or Weis

17:44>> A very bad idea to do it. Yeah. So how so what was the question? Sorry.

Nathan Latka

17:49How do you guys come up with a cap, right, raising 6,000,000 on a note or save?

Or Weis

17:53>> You start by wetting your finger and waving it in the air and getting a gauge from that. And the rest of it is negotiation like everything else in the market. So you try to get a sense of what you can get for this and then in negotiation you move a bit to the left, a bit to the right. Honestly, I wasn't optimizing for the valuation. I was optimizing for the players I want to work with and

Investor Selection Philosophy

Or Weis

18:18>> the types of relationships I want to have with the ongoing longer journey of the company. And I even, I think in some parts of it, I decided to opt for a lower valuation to work with people that I wanted.

Nathan Latka

18:34Yeah, I know that makes sense. That's why anyone should raise it all the time. Should be to bring strategic partners in. But most folks, you know, dilution is a real thing you have to manage. Most folks are selling, you know, 15 to 20% of business in their pre seed or seed round. Were you sort of in that same range?

Or Weis

18:46>> 50% of their business if you're doing 15%.

Nathan Latka

18:4915.

Or Weis

18:50>> Yeah. Yeah. Okay. That's fine. That's fine.

Nathan Latka

18:52Yeah. I'm just I'm just I'm just curious. Were you sort of in that same range as everyone else? Right? 15 to 20%?

Or Weis

18:59>> Yeah. Slightly better, but but

Nathan Latka

19:01basically So better would be you raised 6,000,000 and you were able to get away with selling less than sort of 15%, you know, effectively at whatever that cap would be. So the cap would be something like 20,000,000, 25,000,000, something like that.

Or Weis

19:14>> Yeah. I'd rather not go into the full details, but but yeah.

Nathan Latka

19:19Okay. Fair enough. Fair enough. Okay. So where are you using that capital? Why do you need that much capital to build this?

Or Weis

19:24>> So I'd say two reasons. Two main outlets, let's call it. One is to get the right people and to build something for developers that is such a critical part of infrastructure and affects both the software development cycle and the security posture of an organization. You really need to get this top notch and you need to build top notch things. You need top notch people. So we we don't skimp on the people that we bring and how

19:56>> we connect them to the organization. So that's one and that's that's basically classic. And the other part is buying enough focus time. So with a product led growth motion, your focus we're actually getting luckier than we expected, But in general,

20:17>> best practice is to allow yourself the time to grow organically with the market and focus on capitalization and sales only later down the funnel.

Use of Capital and Runway

Nathan Latka

20:26So how many years or months of runway did 6,000,000 buy you based off your projections?

Or Weis

20:30>> A bit over two years. A bit over two years.

Nathan Latka

20:33Got it. And by the my valuation math was wrong a second ago. If you sold less than 15%, it would have been something more like a six on a 40 cap. But point being, you brought in good strategic partners. You bought yourself thinking time for two plus years.

Or Weis

20:43>> It's more than just thinking time. It's time to kind of adjust and learn the product marketing, but also allow time to allow things to grow. I'll give you an example from another company, a successful company, Snyk, which I I also happen to be, a ambassador for, which is a cute kind of title. Snyk took about, almost a bit over two years to get to a million ARR, which is considered slow if you look if you think

21:12>> classic enterprise slaves. But two years later, they were already a multibillion dollar company. So the hockey stick there is very steep.

Nathan Latka

21:22No. No. I get it. We we have we see stories all the time. I mean, at GetLat, you could fall in his shoes, right? Very similar patterns here. So I'm not discrediting this strategy. I'm just trying to understand what strategy you're pursuing. It makes sense to me.

Or Weis

21:33>> How many folks first. That's the point.

21:35>> Yeah. Growth. Yeah. To PLG growth first. Totally understand that. You wanna get that five install base up to 500,000, 5,000,000 and then sort of go from there.

Nathan Latka

21:43What's the team size today? How many folks full time?

Team Size and Hiring Plans

Or Weis

21:46>> So we're now 13, actually 14. Okay. I think we'll grow to around 16 immediately, and that's what I'm kind of calling cruising altitude.

Nathan Latka

21:57Alright. 16 to cruising altitude. Or we're exciting story here. We're out of time, but let's, in the meantime, wrap up with the famous five. Number one, favorite business book.

Famous Five Rapid Fire Questions

Or Weis

22:05>> I'll give you something that's not exactly a business book, but I use a lot of metaphors from it for business. And it's my favorite book in general, The Selfish Gene by Richard Dawkins. It's a book that basically explains what life is and how it's geared towards to move forward and what evolution is. And I constantly find equivalencies in both business and software development.

Nathan Latka

22:30Number two, is there a CEO you're following or studying?

Or Weis

22:35>> I am a avid admirer of Collison brothers at running Stripe. It's just astounding to see the behemoth that they were able to build.

Nathan Latka

22:46Number three, what's your favorite online tool for building permit besides your own?

Or Weis

22:51>> Online tool to build permit, you say?

Nathan Latka

22:53Just something you needed. Yeah.

Or Weis

22:55>> Yeah. I'd say currently, it's, currently and recently it's GitHub Copilot. I'm astounded not only by how good it is by delivering code, but also documentation. Like I start to write the documentation as part of an MD file and it gives recommendations for the content of the documentation that is slightly better than what I had in mind. So that's powerful on a lot of angles.

Nathan Latka

23:26Yep. Okay, great. Number four, how many hours of sleep are you getting every night?

Or Weis

23:31>> I try to get at least six and sometimes I'd say I'd average at seven.

Nathan Latka

23:36And what's your situation? Are married, single, kids?

Or Weis

23:39>> Married. No kids yet.

Nathan Latka

23:41No kids yet. Alright. And how old are you?

Or Weis

23:44>> I'm I'll be 36 in July.

Nathan Latka

23:47Very cool. Happy early well, it's you still got a a little ways. So 35 years old. Last question.

Or Weis

23:51>> Something you wish you knew when you were 20.

23:53>> Something I wish I knew when I was 20.

24:00>> That's a very good question. I think

24:05>> if you pace yourself, you can learn a lot more things by

24:11>> gradually than by running yourself forward into the wall, which I've I think I've done too much.

Nathan Latka

24:17Guys, 18 and 24, was cutting his teeth in IDF unit eight thousand two hundred. You know what that unit does. He then got into some product led stuff and said, you know what? I hate building the same thing over and over. He's now trying to solve that problem for a lot of people. Right now, Zapier is using it. Tesla's using it. It's called permit.io. Well, permit. Is on top of an open source platform that he's built,

24:36which is gaining traction. To buy himself time to learn and pivot appropriately, they raised 6,000,000 at cost somewhere around 40,000,000 caps sold less than 15% of the business last year. Now 13 strong, trying to go to 16 to get to cruising altitude to keep building out this open source platform. We will see what happens next. Or thanks for taking us to the top.

Or Weis

24:53>> Thank you. It was a pleasure.

Nathan Latka

24:57One 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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