How Salad Technologies CEO Bob Miles grew 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 sheet so we've operated very lean this past year but we've had some really exciting opportunities come our way from big fortune 500s to run workloads across our network um and that's why we're out raising a a series a now to grow the team how many when if i asked you how many customers do you have how would you respond to that this is a great question so we're a marketplace we have suppliers and then we have demand right so so right now users are our suppliers um 20 000 daily active but they're not customers right they're suppliers so demand those who pay you are your customers and right now we are tapping into web three so so this is the why now salad for a moment uh uh the why now moment for salad for the first time it's a few years ago web3 assigned a value to every connected device so we're talking about proof-of-work mining here so we are able to tap into these p2p networks that pay us for our network and that for us was a solution to the two-sided market problem we're able to focus on the human problem of distributed computing how do you motivate people to share their computers without having to worry about that demand side so our customer right now to boil it down to uh one answer for you nathan is web three about how many so how many customers you have well we we so we mine half a dozen to a dozen different protocols and you're talking about helium where you need iot devices and you need to render power and gpu power you're mining helium is a great example yeah it's it's so you might be a uh so helium is a closed network where they have their own yeah hardware that gets distributed we are tapping into the existing capital asset okay understood understood but wouldn't also like amazon be your customer or the people that you're putting the awards cards like how many in how many individual skus do you have listed in your marketplace that people can buy why do you not consider those your customers you know that's a that's a good question um that is an incentive mechanism that is a pricing model so so we purchase those to reward our users for their supply of compute resources so they are not strictly our customer they are a mechanism by which we incentivize suppliers if that's upsets yeah really interesting so then if i was going to summarize your revenue model i'm doing this in under 14 minutes here so you tell me if i'm right or wrong you've got this year north of 1.4 million in revenue of which 713 000 is recognized based off your 23 take another 700k is breakage which you haven't cashed in on yet but you can quantify because users haven't logged in and in six months and then lastly compute power that goes to your network you're actually able to make a little extra juice there by using that to sort of mine on some of these networks to get revenue above 1.4 million is it accurate uh yep top line revenue is closer to to uh well year to date uh a little over three so three three and a half and what did you do last year ah last year was like 150k so we have grown massively in the last this has been our breakout year and when did you launch 2019 uh no 2018 28 2018. interesting so what did you raise the the 3.2 then when you broke 150 000 last year i guess in 2020 when you raised that c the 3.2 what valuation was that out uh well 12 was pre money uh 12 12 12 million free money you laugh when you say that do you feel like you like took you know you took the investors for a ride there you told a sexy story and they said whatever you want bob whatever evaluation you want no the countrymate i think they got a great deal uh fast forward to who we are today um come on 150 000 bucks in revenue at a 12 million valuation i mean i get it you're the vision you own salad.com you know i get it but think this is great look i i i love an entrepreneur who does a good story and minimizes delusion so i'm not laughing at you i'm laughing with you uh i think it's great uh well look hey the investors have a very big slice of the uh the salad pie we uh did that was not our first round so so we had safe notes we had how much before uh two two million before 5.3 we race all together and and look this is nathan i mentioned it before we are introducing a radically new very uncomfortable concept that has massive potential for us to escape uh reach escape velocity that takes a lot of capital so so it's taken a fair bit of dilution um but we're now hitting that um um that that exponential part of the curve which is are you still founder yeah i'm the only fan yeah oh amazing so you had 100 at the beginning well no so so actually in the early days uh didn't have the confidence to found this thing myself so i did actually bring in a co-founder management consulting um about from a management consulting background about to 18 months in 16 to 18 months in we realized we are struggling to find product market fit we need to be more lean and so that co-founder code found the left and and i was left did you buy back the equity um i don't know if i don't know if that's public nice and wait yeah nothing i was gonna say that sucks if you bring someone in and give them 20 and they leave and then you have all this basically unactive equity not on you know not none of the company anymore yeah it does but that's what investing schedules look for right so so that controls controls the damage there how long was that co-founder at the company was under 12 months no 16 to 18. okay fair enough so if you you know assume a one-year cliff and four-year vest people can do their own math there but so bob for off and all basically wrapping up i mean you're basically the sole founder and then you raise two million in saves at whatever valuation then 3.2 at 12. so you know you've sold caught 30 40 of the business today yeah i'd have to check out carter um but that would be that would be around around the the mark plus or minus i'd say nathan who cares you own salad.com nothing else matters uh you're raising your you're raising a 15 million dollar round now what valuation are you gonna try and target uh uh so five million dollar run rate uh we've actually we've got verbal terms uh they're not where i want it to be i want it to be at 60 or 70 pre-money we have got some incredibly exciting revenue opportunities diversified workloads from fortune 500's coming up um here am i telling the story you can't even say the valuation with a straight face oh mate well hey nathan if this is what you do for a living you would be very aware of what's going on in the markets right now oh it is a founder's market i think so you and i both might you and i both i look i think it's great i've seen people raise with no revenue at this valuation so at least you have revenue you're in hot space you have traction i mean i think it's great so good stuff hey wrap up the team real quick and then we gotta wrap up how many folks are on the team full time uh so we've just hired three more we are at 19 plus a support team of six more so so 25 all together how many engineers uh seven now eight very cool all right let's wrap up bob with the famous five number one favorite book my i am a literate i've got idd i've read a book since goosebumps in the late 90s so here's your answer number two number two is there a ceo you're following or studying uh so i'm very interested in the web three space at the moment and and the um ceo kind of figurehead doesn't really exist within that space so so my um answer in lieu of a ceo is looking at these dows these different distributed autonomous organizations uh i want to direct people that have a legitimacy which dow is your favorite you know this is going to come out of that field but it's the ones that are being launched by super token um so so they're really interesting they're kind of mixing um nfts and community ownership of these nsts which then feed into governance of the dow um one of them i just bought into recently would be astra balls i think that's a really interesting kind of fun one interesting all right number three favorite online tool favorite online tool the team's gonna hate me for this but but it's a little bit uh patriotic to say atlassian love atlassian mate are you based in australia no no i'm here in the states but that's an aussie company fair enough no i know we've had we've had we had jay simons on president of atlassian i want to say three or four months ago i think it's a great company are you from new zealand or sydney or from australia from yeah nice all right number four how many hours of sleep every night well i focus on sleep actually he he's a is a plug i just bought an eight sleep pod phenomenal um so i get my full eight hours i sleep well what do you like about eight sleep um it's not so much the tech side like i live in in the tropics now um it's the air-conditioned aspect i run hot at night and eight sleep keeps me nice and cool i should they should give me a promo a referral this up beautifully because they happen to be a sponsor guys if you want eight sleep check it out at nathan lika dot com forward slash before it's like sleep hey hook me up with a referral code right uh good so you got plenty of sleep uh what's your situation married single kids uh married and i got a uh a six week old um wow yeah yeah so so i'm lucky to have a wife who who does does a lot of the night shift um so i can get that eight hours but but hey i roll my sleeve from time to time i love that for sure and bob how old are you uh mid-thirties mid third we'll call it 35 last question something you wishing you when you were 20. okay so i love this this is kind of embarrassing to say uh it took me till 30 to realize this it's it's kind of tangential to the dunning-kruger effect um you know the more you learn about something the more you recognize how little you know uh no one really has a clue what they're doing right like i grew up going through through school thinking that adults had it all figured out that is so far from the truth so that's the one thing i'll be teaching my little kid um uh no one really knows what they're what they're doing we should all respect that a little earlier in life i reckon guys salad.com if you're a gamer basically contribute your gpu power to the system they then use it to make money elsewhere and you earn solid points think of it like money then spend it on the solid marketplace they are going to process about and do about three million dollars in revenue this year between breakage fees uh you know money through the platform and then also mining using that gpu power on you know things like you not healing but things like healing interested space against salad.com check it out raise their last round 3.2 million dollar seat at a 12 million evaluation hoping to raise a 15 million round right now call between a 60 and 70 million evaluation we'll see if bob can get it done bob thanks for taking us to the top thank you bye cheers nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 p.m central additionally remember these recorded founder interviews go live 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