RevOS Revenue (2024)

[00:00] Guys, sold his first company elastic.io, and now he's building revos.ai to help you do things like customer scoring. His his template for customer scoring went viral. They got a thousand leads from that, and that really springboarded them to their six first paying customers that pay on average $500 a month. They're doing 3,000 a month day in revenue, totally bootstrapped, wrote their first line of code in November, and now plan to scale from here. We'll see what [00:21] happens next. Hey, folks. My guest today is Renat Zubarov. He's a serial founder and CEO with a successful exit now in a second venture building an AI revenue operation system at revos.ai. It's his second interview, on the show, and we're excited to jump in. First company was Elastic dot I o. Renat, you ready to take us to top? [00:41] >> Oh, yes. Really happy to be here again. [00:44] I'm excited to have you. Close the book on Elastic because you've been on many times over the years. So did you sell the company? You shut it down. What happened? [00:51] >> Yeah. We sold it. We sold it. [00:53] Okay. [00:54] >> To the strategic buyer, it's like a publicly traded company here in Germany, And they acquired it to build out a product expertise. As a product, revenue is obviously more high quality or at least perceived as high quality on the public market. [01:07] Mhmm. [01:08] >> And that was basically the plan for that. Yeah. [01:10] And this sale occurred, I believe, in 2021. Right? [01:13] >> Yeah. It's quite a while ago. Yes. Two years ago. I think we completely exited it, and we did a little bit of earn out at the end, but we stayed till the end and then also exited successfully. [01:24] Did you keep any equity? Because the reporting said that Cogia AG acquired 51% of the shares. Did you guys keep the other 49%, or what happened to those? [01:31] >> No. No. We were completely out. Me and my cofounder, Igor, we were completely out. [01:36] Oh, I see. Okay. Okay. Got it. And then the earnout was for what? A year, two years? [01:41] >> Three years. [01:42] Three years. Okay. Did you earn because, you know, a lot of founders, they sell their company. They say, Nathan, how should I think about the earnout? Am I actually gonna make it or not? Well, you've done it. Did you actually make what you expected? [01:52] >> Yes. Yes. Yes. I mean, it wasn't easy. Ernesto, obviously, some risks. Right? And the many things changed. Right? Company also grew and but there's also different different you know, once you exited the company, right, you're no longer in a driver's seat. And this change, obviously, the dynamics. Right? It's no longer your company. It's not not not not anymore your baby. Right? And there, obviously, sometimes you make decisions which are not you couldn't really affect in the [02:22] >> in the new role, let's say so. [02:24] Yep. Well, you were this wasn't a small company. I think you'd scaled it to 5 or $6,000,000 of revenue. Right? So I guess, is that right or no? [02:32] >> It's I don't think no. It's I don't think the number is correct. We do not publish or we don't don't announce the official numbers on that, but it's small. I [02:39] thought we okay. So you were you were smaller than 5,000,000 in ARR. Okay. [02:43] >> Yes. [02:44] Alright. Let's move forward to RevOS. Did you learn anything out of like, did you learn about the idea or come up with the idea for RevOS while you were at Elastic, or how'd you come up with the idea? [02:52] >> You know, me and my cofounder at Elastic, we were like engineers. And I think you also have a number of engineers here on your show who are like startup founders, entrepreneurs. And every entrepreneur believe, like, so that we just need to build a great product and then they will come, you know? But what we learned also is the sales is actually a very, very important part of the exercise. But what we also got to learn that [03:17] >> sales is actually it's not it's not an art, you know? Some people believe, like, okay, you need to really hire a great salesperson and then he will go and sell everything you give to him or her. But the sales is just like a process. It's not a it's not a art. It's a science. And this was like a a part of what we now believe in Revos and what we actually bring as Revos to the market [03:41] >> because we see this revenue operations and this revenue process building is essential for every company, and this is actually where we're going in with our new product. [03:51] Are you pre revenue share, or do you have customers? [03:54] >> We do have customers. We actually wrote the first line of code in November last year. And right now, we have, I think, total around about six paying customers. [04:03] Oh, great. [04:04] >> We did this year around about €200,000. [04:08] That's great. How much monthly recurring revenue are you doing today? [04:12] >> I think we are currently ARR on about 30. So out of 200 we did this year, 30 k is is recurrent. [04:21] Okay. Got it. So $3,030,000 USD per month across six. [04:24] >> So this [04:24] >> is these are large contracts with these six customers. [04:26] No. No. [04:27] >> No. So so $3,030,000 ARR in annual. [04:32] Ah, got it. [04:33] >> It's it's less. [04:34] Okay. Got it. So so six customers paying on average 400 a month, something like that. 400, $500. [04:42] >> A bit more, but it's like, you know, the variance is bigger. So this is each number, but it's more than so actually, the the the variance would be a bit higher. Yeah. But this is, I think, the right the right direction. Oh, [04:55] 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 founder path. Check this out. I'll show you how you can access this in a second, but you log in, you connect [05:18] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founder Path dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're [05:42] gonna get 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 [06:04] is not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders 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 [06:30] you're going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founder Path. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, [06:52] but if 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. Alright. Let's jump back [07:18] into the interview. Okay. But, generally, you're doing $3,000 a month, which is about 30,000 or $35,000 of ARR. Okay. If that's the case today, but you said you're you did this whole year, you did over $200,000. How did you do $200,000 if today you're only doing $3 a month? [07:33] >> We're also applying our learning from the previous company. Remember the saying from, I think, Paul Graham, who said, like, do things with Delta scale? We are working such on such an such an urgent problem for every company. So we actually charge our customers for the for the additional provider, for additional services we actually deliver to them, and they're happy to pay us this money. [07:55] So you did you did you sold some consulting and services this year, which is how you generated revenue. Okay. What did those look like? Did were they required if they paid you services to then buy the recurring software on the back end? [08:06] >> It's actually a transformative. Like like many also companies on your podcast, right, who are actually combining this agency and software and transforming between them, we follow this path. Think this is also a very good path because first of all, we learn real problems, you know, where people pay real money, and then we replace our services with software as we build software along the way. [08:30] Yep. No. That makes really good sense. What kinds of things and questions are you asking during the services delivery process to identify what software to build? [08:40] >> Oh oh, that's basically very simple. It's like, what is the most precious problem we actually wanted to solve now? And what are the KPIs you want to see that the problem is successfully solved? And then we try to build a software and also build the systems and infrastructure to deliver the, let's say, the solution as fast as possible, and then make sure the solution is can be productified. So it's not like, you know, one off or [09:06] >> one customer, but really like a repetitive product sale. [09:09] So what are they what are you hearing when you ask them? What's the KPI you care about? What are they saying? [09:13] >> Oh, that's very very good very good question. So many people like asking us, okay. How can we how can we sell more? How can we increase efficiency and effectiveness in our sales, customer success, and account management processes? How can we make sure that our salespeople know exactly what to do for with the customer at hand, with the deal at hand, with the lead at hand, and with the customer, existing customer for customer success? And what are [09:40] >> the best possible actions they should do now with that particular customer to make sure that either opportunity is close won or a customer does not churn or customer buys more of our stuff. [09:54] Yep. How did you land Henry Schein, Simplifier f 24? How'd you get them as customers? [10:00] >> Mixture of, like, outreach. So LinkedIn I think LinkedIn network, some of the automations, like, you know, like Apollo, I think, is a very good tool. We use it a lot. HubSpot is also very good to help support, as well as the content, actually. So we actually did a lot of interviews in the beginning of RevOps. And based on these interviews, we created, like, a spreadsheet for customer health scoring. I'm not sure if you're familiar with the [10:28] >> concept. It's like how to score the customer relationship, like, in numbers. And this customer health scoring spreadsheet is now the most widely used customer's health health score model on the Internet. So, like, it's downloaded over, like, 2,000 times already [10:41] from where can we view that? [10:43] >> Oh, you just go to Revos AI and then just scroll down. You can see it over there and download it. There's, like, companies like Microsoft. [10:50] What is it, though? [10:51] >> Is it the customer the customer health score course? [10:54] >> No. It's customer health score template. Template. [10:57] And then it's in your footer. Yeah. Okay. Got it. Let's dive deep into this for a second. And so this is just a I mean, it's a it's a glorified effectively Google Sheet, but you're saying, like, how did you so you build this and then you post it on LinkedIn and then it went viral and then you put a landing page up? What was the order of operations? [11:12] >> Correct. Yeah. We actually build the landing page. We did a lot of interviews with customer success people, build the landing page and put the knowledge into this. There's, like, over 60 different criterias how you can score your customer health scoring, and then it just went viral. You know? The the, like, downloads, like, few downloads every day over the last year or so. You know? [11:33] How many total downloads? [11:35] >> Oh, I I don't actually, I don't have an exact number, but it's definitely above 1,000. [11:40] Interesting. So is this your number one lead gen source right now? [11:45] >> It is. Yes. It is. I think this is like a starting of the conversation, and there we see, like, intent, and also people will download it. We reach out. There's a sequence behind it, and then we'll definitely get into the conversations. [11:56] Yeah. This makes a ton of sense. Okay. So six customers today. You you're using these landing pages to get new customers. How do you go from six customers to a thousand customers? [12:05] >> Yes. That's a very good question. We are currently experimenting with search engine optimization. You know, we are big believers in this, like, you know, validating and testing hypothesis fast and cheaply. And this is actually where we now invest our resources and time to really see, like, if we could possibly generate some compounding effect on the infrastructure and also resources we actually deliver. And additionally to that, we launched our product, which is now available. I think we [12:40] >> launched it on Dublin, by the way, where we lost time at. We launched it on a conference and and also opened registrations for it. So, actually, we have, like, a three d plan where everyone can build its own customer health score, like, in minutes. [12:54] You took the customer health score concept and then also launched a Udemy course. How is the Udemy course doing? [13:00] >> Oh, that's a good point. We actually did, like, an interesting presell to that. I think we earned maybe some few thousand dollars of revenue with presell of this course. However, the course itself, I would not do it again, to be honest, because it's actually mostly it's very hard to promote it. It's actually not very workable in a sense. And we're actually going to close it or do it for free or give it give away it for [13:28] >> free on Udemy. We are a German company, and Udemy has some very complicated taxation forms we need to fill. And all the revenue there is, like, maybe a few $100 right now. So we're just like, hey. You know what? We just better open it and just maybe push it on our website instead of Udemy. [13:45] And did you get leads from from Udemy or no? [13:48] >> We are not actually legally allowed to approach these people who are buying a person legally in in Udemy. We didn't expect that to be when we started this discussion, but I think the content we generated is very valuable. So we're definitely going to generate more leads with this content. [14:04] You're in the HubSpot Solutions Partner Program. Do you get leads from HubSpot? [14:08] >> Not yet. Actually, we just launched last week a new program where we delivering, like, a customer success solution on top of HubSpot. We see this as a significant white spot in the market where people are buying themselves like a second CRM, like Totango or ChurnZero or Planhat, you know, and then fight with the data integration challenges and all this kind of mess which is created by second CRM in in operation. And we believe that we can [14:40] >> just deliver the best possible experience out of HubSpot, and this is actually the new thing. [14:45] Who is doing this the best? I mean, you mentioned churn zero. There's a lot of companies that sort of say, hey. Score your customers. But who do think is doing this the best right now? [14:53] Think there's Besides you? [14:55] >> It's a good question. Yeah. So the reals are definitely on top. But I think there's definitely very few players right now on the market which actually can do it [15:06] >> scientifically proven good. You know? The problem with health score is, like, it's very much biased, right, in the sense that when you build it, you just build it on top of your gut feeling, and very few people can definitely validate it. And you need some data science expertise to validate it. But we see a lot of interesting approaches definitely from companies like Vitaly, and Totango is doing a very good job in content. They are very, very, [15:31] >> very nice. But Tatango is rather old system, you know, it's a bit clunky. You know, it's developed like Melbourne ten years ago. I think you had like a founder of Tatango here Yeah. In And they do an excellent job in this, like, educating the market. But what we see there is definitely a merge between this customer success management system as a separate system, like a separate silo, and the revenue stack in general. So we see many [15:59] >> companies, once they advance in the development, they establish a revenue function on top of, like, individual silos. Therefore, this individual solution is making less and less sense. [16:10] Yep. We're not we're out of time here, but some quick questions for you. Did you raise capital here or are you bootstrapped? [16:16] >> We're completely bootstrapped, actually. It's all funded by my own money. [16:20] We love that. Okay. Let's wrap up with the famous five. Number one, your favorite your favorite book. [16:26] >> Oh, it's actually I have two books for you I prepared. First one is Thinking Path, Thinking Slow. This is also the same as I mentioned on a previous interview. Oh, that's like and the second is Never Split the Difference from Chris Waltz. [16:38] >> Yep. [16:39] Number two, is there a CEO you're following or studying? [16:41] >> I really like what people what guys what Alex and Bastian from Celonis are doing. I'm sure you didn't have them here in the interview, but this is, like, one of the most interesting startups from Germany, which I saw, and I spoke with with Bastian, like, a few few weeks ago in New York. Really, really interesting company. [17:02] Number three, what's your favorite online tool for building Rebo OS? [17:06] >> We're using Notion a lot. Also, Notion AI now. So it's very nice very nice tool. Love it. [17:11] Number four, how many hours of sleep do you get every night? [17:14] >> Oh, about six. About [17:16] six. And situation, married, single, kids? [17:19] >> Still married. Still three kids. But the oldest is already out, so he's studying in Munich right now. [17:25] Ah, amazing. And how old are you? [17:27] >> 43. [17:28] 43. Last question. [17:29] >> Something you wish you knew when you were 20. [17:34] >> I think what what I wish you it always takes longer than you think. That would be, like, my my wise wise advice to myself when 20. Yeah. [17:44] Guys, sold us first company elastic.io and now is building revos.ai to help you do things like customer scoring. His his template for customer scoring went viral. They got a thousand leads from that, and that really springboarded them to their six first paying customers that pay on average $500 a month. They're doing 3,000 a month stay in revenue. Totally bootstrapped, wrote their first line of code in November, and now plan to scale from here. We'll see what [18:06] happens next. Or not, thanks for taking us to the top. [18:09] >> Thank you. Thank you, Nathan. [18:11] One 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 [18:36] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big [18:58] 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 have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign [19:20] up for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those [19:39] people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.