How Qualified grew Qualified to $2.5M revenue and 350 customers in 2019.

hello everyone my guest today is nathan doctor he's the ceo and co-founder of qualified.iowa rapidly growing platform for assessing engineering skills that are used and is used by companies including apple ge and vimeo the company also built codewars.com where over a million software developers train their coding skills he's also a managing partner at synapse capital crypto asset investment firm nathan you're ready to take it to the top completely ready all right man so i mean should people think about this like kind of udemy or creative live but specific for developers or more like a treehouse or a top tower where you'll hire developers yeah great question so we're more in the hiring realm so i'm not really similar to any of those but on the assessment side so where we fit is in the hiring process so there's really two sides of the business on the company piece with enterprises a lot of the clients you just listed off what we're doing is we're helping them identify and surface the best quality candidates in their pipeline so helps them increase the speed to higher reduce the cost to actually finding candidates and also unearth resumes that otherwise would get overlooked okay got it so you might send up an email automation for every time a resume gets submitted via indeed to vimeo vimeo auto replies with like a quiz link and that quiz link is powered by you exactly so that quiz link that they take them through is a real coding challenge so it approximates real world work on the job and we're actually testing them based on the development skills are you a developer actually no which isn't come on i was about to say nathan you have the answer to this question has to be yes otherwise that you're working some magic how the hell do you do this it's all on the developer side it's all my co-founder jake so jake's the cto of the project and he's the one that's really the it's his brainchild in terms of actually developing it and what's your guys's revenue model i mean this is a sas model or a per placement fee or what yeah so we do a sas model so we're really focused at fitting into that hiring process so they're using us throughout the year regardless of the candidates that come through um all of their flow actually funnels through our platform so we're charging an annual contract okay i don't want to go on every customer court i'm sure you have a lot of different sizes of customers but on average what would you say a customer pays per year to use your tech yeah of course so um across the range is from 6 000 to 17 000 depending on the cohorts okay cool and why would someone pay six for 17 and that's annually right yeah why would they pay six for 17 i'd just be the scale of a customer so on the smb side we have smaller growing businesses versus on the enterprise side yeah but measure by what like number of seats number of applications per month what's the unit amount right so the vectors that we actually charge based on are the number of assessments they're running through per month and then we also have a seat count so that would be for recruiters that fit on the platform engineers that are evaluating it are helping set up the assessments interesting and give me a sense of volume so i mean trailing 12 months how many total assessments to your platform that's a good question so we typically on the actually don't have a assessments number off the top of my head but we're in the millions so okay there's a significant amount of volume yeah million plus that's good and then put this on a timeline for me when'd you launch uh so we launched qualified in 2016 and spent the first year really just getting platform right testing out the revenue model there's a lot of iteration there and then the last few years really been scaling the south side what uh this is always a fun question what'd you spend total on your mvp do you remember uh it was quick and it we did in a weekend actually so i mean less than a grand yeah we like we built it out over a weekend and we're actually getting paying customers by monday how did you okay so how did you do that right how did you get your first customer yeah so the caveat there is we actually started a company that a product that's also part of this company called codewars and so what codewords is is a community for software engineers to train their skills on coding challenges so that's where we develop the methodology that we use for testing engineers and through that we built a community about a million developers it's widely used by developers in college all the way up to senior level engineers on the in the workforce as a way to pick up new languages and skills do brands google facebook pay you to send like a sponsored you know email sends through like to your user base i imagine they pay a lot of money for that yeah there's definitely a revenue opportunity there but that's not something we've gone after just because we're really focused on keeping that codewords community uh very clean yeah so basically if google reached out and asked that you'd say hey no the way to get access to our user base is to actually sign up for a paid plan and we'll help you do your your you know coding yeah exactly so we do have a revenue stream that comes through codewords there is a sas component of that too where hyper users can actually up pay to get access to better feature sets but for the most part it's a free community better feature sets like what like like harder challenges no so the content's all there but there's a few different aspects we call it code codewords red and they start to be able to get some of the feature sets so they it's a kind of a range of things that make it easier for them to use the platform so they get prioritized code execution so for example if there is a lot of volume um theirs gets put to the top there's also a way for them to actually mark and see other challenges to learn from it more effectively when did code wars launch codeword was launched in 2013. okay so that came first and i assumed that was your co-founder who set that up yeah so we started that together we actually interesting story uh we met at a hackathon um i pitched the general concept of it met him right there we built the product in a weekend just kind of like qualified and launched out that weekend got our first two angel investors that's great um what the angel investors put in uh so the beginning it was 90 000 for that first angel round so it's relatively small that's great and now the now is code wars if i'm on the cap table of qualified does that mean i also own a percent of code wars or are they separate yeah exactly same entity okay so total race to date is how much total raise is a little over two million a little over two million yeah that's great i love that you've stayed i mean you've stayed pretty darn lean what i love about this is you built the distribution channel first and the product second i think people spend way too much time today building product first and then trying to figure out distribution when distribution is way more important in my opinion yeah absolutely that's the hard part in a lot of cases how did you i mean what were some of the things where you saw like viral growth on getting new people into code wars between 2013 and 2016. yeah so one of the biggest things that actually made a difference is that we really gamify the entire community so you earn honor and you earn rank and status as you complete challenges so that rank and that honor kind of creates your standing in the community and also shows off how strong of developer you are across different languages so the first um mvp that we put out there we launched out to hacker news we got 10 000 developers to sign up within a weekend and essentially all it was was a few example challenges that people could take on a landing page and they actually earned gamified honor on that landing page and then we had it scrolling to show the top 100 people can i see this this is so viable can i see a screenshot of this anywhere ah that's a great question we probably have one somewhere in our archives you have to send it to me wait okay so because see part of getting gamification right is understanding where and when to apply social pressure via pixels on the screen right so what i'm hearing you say is trying to describe it again on one screen they could take the challenges and there was like a leaderboard on the right where people's names were showed with like who had the most honor exactly and you earned more honor by completing more challenges yeah so as you went through the stack there was seven challenges that we had pre-filled in there that you could create that you could take and they're an honor but then at the end of it we actually created a viral mechanism where you now could earn more honor by emailing it to your friends you could earn more honor by tweeting it out so there's a whole component of social aspects and you can even link in your facebook or twitter accounts okay did that their whole earn more honor by tweeting emailing your friends it sounds good when you actually measure that though did it truly drive growth that was actually probably our largest source of growth for coders in the beginning which one was it tweeting sending an email a facebook post which channel i would say twitter and then email facebook was far behind how would you ch how would you track if someone emailed their friend about code awards did you set up a custom referral program or something exactly so there's a custom referral link so even after they sent it out...