How Phantombuster CEO Guillaume Boiret grew to $600K revenue and 2K customers in 2019.

hello everyone my guest today is guillaume wallace he is the founder and ceo of a company called phantom buster all right guillaume you ready to take it to the top yeah sure all right tell us what the company does and what's the revenue model how do you guys make money um today we are working for marketers and we decided to help them to create leads um using social networks like facebook twitter and instagram and mix this data to have the most interesting uh leads that they need okay and so how do you do this we are automating um websites and social networks uh with a little apis that make some some work some easy work that you can combine together to create your own gross engine okay and give me a general sense of what companies or marketers are paying uh to use your technology on average per month um right now it's uh more than 100 uh 100 dollar per month okay something like that that's great and put this on a timeline for me when you guys launch we launched in uh 2016 but we were a tool for developers at this time and we pivot in 2017. so tell tell me how much you guys spent building the mvp before you had your first dollar revenue um it was something like uh uh 50 uh 500k 500k and why was it so expensive to build it because it took a lot of time for us to to build the the product how did you get the first 10 kind of customers um we when we spent some some time in in san francisco and we met some influencers uh and uh when one of them talked about us uh we had uh our first uh you said freelancers users um no influencers oh who who was it who talked about you first uh i talked to to uh guillaume caban uh and josh fester for example josh felcher fester uh which company was uf um banff bamf ah yeah yeah okay so that was how you got kind of the first 10 customers and then how many customers are you serving today um more than one time um paying users yeah one thousand paying and how many total free and paid um three to thirty thousand thirty thousand so what's the critical moment i mean how do you know when to put up the pay wall to get people who are using you for free to convert to paid right now our users are using one api at a time and when they really understand that they need to combine apis together they start to pay mm-hmm and so can i do the math a thousand customers right now paying on average a hundred bucks a month because they're doing about a hundred thousand dollars per month right now in revenue almost yes okay and what were you about a year ago do you remember a year a year ago we were at uh four uh four thousand dollars four thousand dollars a month okay so that's nice that's obviously nice growth year over year what what changed what did you guys do to drive the growth um we we talked to our users and we we we decided to be very um active with the gross hacker gross marketer community how did you do that specifically what website did you engage with we we worked a lot on facebook on specific facebook groups uh yes and it was um it was a linkedin too so we we we where where uh our users are uh and it's on social networks and google facebook groups uh there is a lot of people here so which facebook group was the most effective for you in terms of which one gave you the most new customers um it's hard to say um i i would say the uh the banff badass marketers and founder group facebook group is josh an investor in the company nope okay have you raised bootstrap today or did you raise capital uh we raised capital in france uh 600k last september and are you looking to raise now um not right now we know i want to finish the second version of phantom buster and uh we will raise money when we come back in the u.s maybe uh in the middle of next year and what do you think the right amount at that time will be to raise you talking like three four five million or what would you target um something between three and five okay and and what would you i mean why do you need to take that delusion why can't you kind of just grow the company based off revenues um we we can we can uh we can we can do that but it's not the same company we can grow slowly but surely but we want to create a workflow um marketplace where developers will be able to create new apis and marketers will be able to create new actionable strategies and that's a lot of software so we need a lot of engineers and we want to grow fast uh because the competition is here so really we need to with some some they're zapier for example uh the the this this this is possible to um combine apis together on zapier this is very powerful and we definitely definitely want to do the same thing with scraping based apis but also with uh with a more classic api so we we need to grow fast and what's your team size today how many folks today we are nine at uh nine with nine and are you guys i mean are you burning capital right now are drive growth are you cash flow positive uh right now today today uh we're um cash flow positive but we want to double the team uh in the next quarter so that will uh that will change and and are the customers i mean are they sticky when you look at churn over the past month what's it been uh it's uh it's not that uh that great actually we want to work on that um our churn rate is um more than uh six percent uh seven percent actually uh every month so it's a lot so so annually you're turning about 84 to the base and do you have any expansion revenue like do you upsell people or do you not really have any upsell metrics right now um yes we do you have any things to upsell customers or no yes yes we we do um the um when when we we are able to uh to explain to our users that they can use more than one api they they upsell so you lose call at seven percent a month but how much do you expand by not new customer editions but upselling old customers uh 80 percent eight zero eight zero and that's eight no no no no no no no sorry eighteen eighteen eight eighteen eight and that's annually or monthly monthly okay that would mean that each year your expansion revenue is almost 216 percent 18 percent a month uh yeah yes 18 a month it's uh yes okay so 18 expansion minus seven percent churn right would mean basically you have what is that twelve percent a month in net revenue or 112 percent net revenue retention per month yes okay you understand why that map doesn't make sense correct yes do you understand why that math doesn't make sense sorry i don't i don't have the connection the connection the i'm not saying anything okay sorry uh the connection's fine so the the the mrr is uh is more than uh 50 000 per per month mrr what is your mrr today 50 000 okay not a hundred thousand so you have a thousand customers paying on average fifty dollars a month for fifty thousand dollars a month in revenue is that correct yep and a year ago you were doing about four thousand dollars a month yep okay what i'm asking about are your churn metrics right so you said you're turning seven percent of your revenue each month my question was expansion revenue do you know what your expansion revenue is 18 doesn't make any sense um yeah sorry about that yeah it's okay it's sometimes it's just how we measure stuff right so like if you look at the customers you signed up exactly one year ago and you look at let's say it was ten thousand dollars a month in revenue is what you signed up exactly a year ago what you're saying is you'll turn i actually i'm i'm not really um i'm i'm uh i'm not really comfortable to share those those numbers so i tried to uh to make something in an average and then the math didn't work uh um i i do i have to share those numbers no no you don't what you the problem is you well you are you already i'm just only asking questions about numbers you already shared the numbers you shared don't make any sense so you're saying you just made them because i i i i made a mistake because i wanted to make some average numbers and it was not fair enough let's just stick to you you said seven percent churn per month is that accurate yes okay we just won't talk about it yes it is and it's uh it's a it's a it's an issue for us to have this uh this uh churn and we're working very hard to to change that and that it will be this is a lot of work that we we had to to change uh for the new version of phantom buster so yeah we are focusing on the churn for the next version how do you mean how do you think you drive churned down i mean the problem is look i use phantom buster so i will use it like one month on a campaign and then i cancel like i have no need to keep using every single month i imagine a lot of customers are like that so how do you make it more sticky um we we need to um to give to our users uh actionable strategies that works on the long term um because when you want to for example when you want to grow your audience on linkedin you will have to find always to to always find new leads to add into your your audience and that is something that we we need to push because right now a lot of our users just as you said need to extract some data from linkedin and that's it so our work right now is to explain that we need to create workflows and a workflow is a combination of different apis that can work for you in the long term and that is the purpose of phantom you had some success on product hunt back in february with 1400 upvotes um help me understand how that worked for the company so typically when we interview folks and they had a successful product on launch they'll see anywhere between five and ten thousand website hits that day if they rank number one how many hits did product hunt drive you when you ranked really high um not that much actually uh it was uh it was um more something like the like it was awareness awareness but uh we we didn't have the um a peak of uh of subscriptions uh during this uh this campaign how many hits did it drive you though in february sorry how much what yeah yum so when you launched on product hunt on february 13th all i'm asking is how many website hits did it drive that day i don't have the number okay do you have a general estimate i mean are we talking like thousands or tens of thousands of hits uh more than couple top couple thousand okay and were that was that a meaningful group in terms of actually converting them to paid or did you not see a lot of paying customers come from product hunt no no not that much and why do you think that is um i don't know um a lot of people who talked about uh phantom monster were um already um users and some paying users uh because we talked we made some campaign into to our paying users so they can explain that uh that um that we didn't have more as much as we thought the new paying users well i mean i think part of the issue with this is exactly what ubert a product commenter said which is people can abuse this tool right um and then you know from an investor perspective they're gonna ask you questions like well will linkedin shut you down and things like that so while the tool is very valuable to people who use it responsibly how do you deal with irresponsible users or potential platforms shutting you off from leveraging your api inside like linkedin um that's a very interesting question first of all we we ask our users to um use um use their social networks carefully and we say okay you can automate stuff but uh you will not be able to go more you do more things that that what linkedin allows you to to do so there is rate limits and you need to be lower than those rate limits uh so our users are um taking this advice and they're doing the the work well uh and about uh about what we what we do we just we're just automating uh stuff and uh we are not uh selling data or sharing data yeah but like linkedin for example i mean have you had any contact with linkedin have they asked you to shut down [Music] no okay do you think that they like that you enable people to essentially connect with up to 200 people every day hitting their rate limit basically at scale just prospecting it depends on what kind of stuff you're doing on on linkedin but um but no i don't i don't really understand because it is exactly um the same thing as asking your in in turn for example to do repetitive uh simple things uh so it's uh it's just uh doing um one one step at a time and it's not it's a simple actions that you can do by yourself um but you don't have you your time is too valuable to to do it so um we we are automating uh stuff at a human volume so all right let's wrap up here guillaume with the famous five number one what's your favorite business book um i have fun let me no i don't i don't have okay none is fine number two it's it's cheesy right a lean startup number two is there a ceo you're following or studying uh yes i i really like uh to follow what uh algolia's ceo is doing yep and guys if you want to see more of the algolia interview and how they hit 40 million dollars in ar you can go listen to that interview back five episodes ago number three what's your favorite online tokyo for scaling your company besides your own um i really like um lemnist of course yeah and i think there is a lot of stuff to do on on zendesk we are working a lot on zendesk and understand um what uh what the customer uh success is because it's very important uh for us number four how many hours of sleep to get every night um eight i need to sleep a lot and how old are you i'm 32 32 and which situation married single kids uh i am um kind of married in france there is something like pax it's kind of married okay any kids no no not yet and last question what do you wish your 20 year old self knew what my what 20 year old self knew something you wish you knew when you were 20. uh uh i wished uh to be a very powerful developer uh but i changed the way i i worked and now i'm a ceo and i'm not a developer at all but uh when i was 20 i really wanted to be a very uh great engineer guys phantom buster serving a thousand customers paying 50 bucks a month doing fifty thousand dollars a month in revenue from four thousand dollars a month just a year ago i spent about 500 grand to build their mvp and today have raised six hundred thousand dollars they are profitable team of nine people churn is a major issue seven percent uh turn that's monthly so eighty four percent annually they're working on bringing that down by making uh giving more use cases to their customers to stick over longer periods of time hoping to raise a three to five million dollar round and call it q2q3 2020 when they're back in the states in the meantime guillaume thanks for taking us to the top thank you very much