How Salad Technologies CEO Bob Miles grew Salad Technologies to $10.4M revenue and 25K customers in 2024.

hey folks my guest today is bob miles he's an avid traveler and serial entrepreneur with the history and startups ranging from iot connected car platforms netflix tv shows consumer drones and distributed computing platforms today he's the founder of salad.com and is partnering with millions of gamers around the globe to build the world's largest cloud computing platform bob you're ready to take us to the top ready to go nissan all right everyone just wants to know what you paid for salad.com that's a hell of a url it was a bargain mate um so i won't spill the beans on the actual price it was about half what these like tools that that um judge the price of websites suggested and but we actually bought it off by hidden valley ranch that owned it since 1996. that's historic what year did you buy it in uh we bought it this year oh you just bought it okay very cool all right let's let's get some of this story here so so from what i understand from what i can tell here you're effectively enabling me to make money from my computer when i'm not using it actively by basically submitting it to your network is that accurate for someone that doesn't you know it's not deep in your space that's right nathan so uh we believe every computer has meaningful value these days you know our lives are becoming more and more digital demand for compute resources is exploding and every connected device now has meaningful value and so here at salad we allow you specifically gamers that's where the unit economics are good um gamers to share their powerful computers with gpus uh so that when they're not playing games they can turn that down time into games gift cards subscriptions um there is a catch you know running your computer does does cost electricity it might add five to ten to fifteen dollars a month to your bill but the computer i'm on right now that generates about 60 to 65 a month worth of uh digital spend for me and yeah and through that so it's an open source client um i mean if you think about what we're introducing nathan it's a pretty uncomfortable value proposition you know share your computer with someone else when you're not using it i see it being analogous to airbnb or uber 10 15 years ago you know complete strangers going to pick you up in their car complete strange is going to stay in the room next to you uh we're bringing the same uncomfortable value proposition to market uh we've been at that three years but uh uh yeah with our open source software so you can see what you're installing um we're now the world's fourth largest supercomputer and measured measured by what by teraflops great question yeah by teraflops so that is essentially the horsepower of your computer the uh processing power single point teraflops so what are you at now what are your single point teraflops a little over 70 petaflops if that means anything to you it doesn't i'm trying to can you say that's like stacked papers to the moon and back 7 000 times or how do you make that real for my listeners mate you know i haven't really thought about that um so here's the way i benchmark it uh it's not apples to apples because we're an airbnb model you know airbnb doesn't own the hotel rooms um but we are the equivalent of of um it's a chinese supercomputer it cost them 273 million dollars to build um this computer with the equivalent processing power that's probably the best i've got for you nice so it was your last valuation then 273 million dollars ah that would be nice no no a long long way from that but we're getting there all right fair enough how do you make money yeah good question so today we give a hundred percent of the value your computer generates to you uh so we project the balance to you and then our business model exists within that positive cash cycle so you know the tens of thousands of nodes on the network right now we are the custodians for all the value so there is an element of breakage there there's some abandoned balance but then there's also um reward distribution margins so that money that your computer generates you can only spend it through our storefront our network and we take a margin from that spend so that's representative of today um where we're going in future is looking to aggregate a lot of different workloads the cost of our compute is around one-fifth again per teraflop per hour of an aws spot instance so there's margins on the compute side further down the line we're working on some really exciting projects on that front i submit my computer to your network for a full month let's say i earn 50 bucks for medic i cost it cost me an extra five to ten bucks electricity so i'm netting 40. you're giving me effectively 40 that i can now go spend on the salad marketplace let's say i want to spend that to get a 40 amazon gift card how much of that 40 bucks do you get for bringing that business to amazon yeah great question so for a 40 amazon gift card we actually list these we have them um we charge you 50 50 bucks with a salad balance so we're taking and it's different for every reward so on average net netted out across um all the different rewards we're at 23 uh but for your specific example um the markup is from forty dollars uh to fifty dollars that's what we charge you in salad balance you have to go negotiate every one of these deals with amazon with discord with anything you list in your marketplace that feels like a huge bd operation oh mate it is it is the achilles heel uh for us scaling right now so so our vision is not to become another e-commerce marketplace um we want to be the easiest and most trusted way to share computer like we're the experts at extracting that value so today we work with a couple of different suppliers uh that provide all these different games provide all these different gift cards so so we're able to kind of consolidate down the relationship to a few but things like discord we have a direct relationship with them where we purchase these subscriptions wholesale um at a wholesale price um and then distribute them but ultimately i mean you've described what's next for us in our our go to market strategy we want to build an sdk that allows other people game publishers studios your content creators to extract the value of of their install base of those pcs so that we don't have to deal with inventory you have salads balanced salad balance paid on your website listed right at 3 million bucks over what period of time uh that's year to date we update that manually so it's a little bit outdated but that's why i asked yeah um 2021 year today what is it like guys up today you're probably going to tell me something more updated than what's on the website yeah it's it's it's a little over three yeah it's a little over three it was updated um quite recently actually because we're actually getting sued um for accessibility on our website so we've had to bring our website into into spec um you know the two options we were given this is taking a turn you probably weren't expecting this is really interesting and it's and it's important for anyone who operates a website um uh you could be sued if your website is not accessible to those who are vision impaired so we have now gone through a huge effort recently to bring it up to spec make sure it's uh accessible according to a couple of standards um but but ultimately we're not a public accommodation so it's a frivolous lawsuit but uh it's been an interesting kind of sideball that's been thrown at us recently as a small startup it's not what we were expecting usually when you're getting sued is when you've made it um i wouldn't say we're quite there yet we're waiting for that 273 million dollar valuation understood when you do the the 3.1 or whatever million in salad marketplace spend year to date that's the 50 number you just told me that you would bill where i'm getting like a 40 amazon gift card right uh yes yep top line right now exactly so we're a marketplace we don't have sas margins we're we're a marketplace but i can take 3.1 million in volume this year times the 23 percent rate that's the average margin set across your marketplace to assume you guys are doing something like 700 000 in revenue this year yeah plus there's breakage uh so we also have that model bacon baked in um and where does that mean sorry can you quantify that how much revenue you do breakage revenue this year yeah you know it's funny because i didn't know what it was either um uh breakage is kind of like the gift card model right so you can people will purchase great gift cards and either never use them or they expire depends on what state you're in um but once you translate it from usd into v-box into starbucks gift card into target gift card whatever it might be um not 100 of that value will be spent that is breakage um so how much will that be this year oh gosh right you're diving deep um that so so that is a time dependent factor uh 18 of the balance outstanding belongs to people who have not logged in in six months or more so that is a general rule of thumb um but we right now do not mute anyone's balance you just let it sit there yeah we let it sit there so we haven't realized that yet um but that is a an element you know we're c plus stage pretty early uh we're actually out raising our series ain't now how much are you looking for 15 million 15 million and this would be your you said sorry your this would be your seed uh no this is series eight we raised our c plus this time last year uh we raised 3.2 million we still have more than two on the balance...