How Scalestack Grew to Nearly $40K in Monthly Revenue with 12 Customers, Bootstrapped (Interview with Elio Narciso)

Introduction and What Scalestack Does

Nathan Latka

00:00Hey, folks. My guest today is Elio Narciso. He's building a tool called scalestack.io. He's passionate about technology and making the world better and having fun while doing it. The tool is a B2B data platform to help you accelerate your sales. Elio, you ready to take us to top?

Elio Narciso

00:15>> Yeah, sure.

Nathan Latka

00:16Great. Thank you, guys. You bet. Yeah, I'm glad you're on. Data is a tough space. Everyone buys everyone else's data. It seems like it only repackages it. Do you have any unique data source you're using?

Data Sources and Proprietary Scoring System

Elio Narciso

00:26>> I would say that, it's not just data, it's tools that we build on top of data. So for instance, we use like sources like LinkedIn, Crunchbase, PitchBook, but what we do is that we build tools on top of them. So for instance, for our customers, we listen to their ideal customer profiles, we model it and then we put like a scoring system on top. So, you know, like the ideal customer profile provides the inputs, the data

01:00>> sources provide the output, but they are then scored with our proprietary tools.

Pricing: What Customers Pay Per Month

Nathan Latka

01:07Very cool. And so what are customers paying for this on average per month?

Elio Narciso

01:11>> Most of our customers pay between $2,000 and $6,000 per month.

Nathan Latka

01:17And do they stick?

Three-Month Trial and Annual Contract Model

Elio Narciso

01:18>> They stick, yeah. We usually have like a three month paid trial so that they can like, you know, we both like see if the model makes sense for them and like, you know, sort of like they can check if the ICP gets matched and then they switch to an annual contract. I would say like, you know, 90% of our three month trial convert to annual

Nathan Latka

01:44Very very cool.

01:47Many customers today?

Customer Count and Target Segments

Elio Narciso

01:49>> Today we have 12 customers. And I would say that there are like two groups of customers. One is like NASDAQ listed type of technology companies that have already experienced at scale massive pain points in having their salespeople

02:09>> search for data on LinkedIn, Crunchbase, and so much that there are stats that says that 60% of salespeople time is spent researching. And so they need to solve this problem at scale, the problem of finding targeted account and prospect lists. And so I would say large tech companies already IPO'd. And then the other group is the Series B type of startup that is already starting to get obviously product market fit, but more than that, they're

02:43>> starting to structure their B2B sales ops. And so those are the two groups where we're having lots of success, typically tech companies and companies that sell to other enterprises.

Current Monthly Revenue

Nathan Latka

02:57So can I take those 12 customers times 2,000 a month? You're doing about $25k a month right now in revenue?

Elio Narciso

03:03>> It's actually higher than that. We are doing almost 40 ks.

Nathan Latka

03:08Okay, 40,000, so almost $500,000 a year run rate. That's great. When did you launch the business?

Elio Narciso

03:14>> We launched last year, early twenty twenty.

Nathan Latka

03:18Okay, and what did you finish last year with in terms of MRR?

Revenue at End of 2020

Elio Narciso

03:22>> Last year, it was only like around 9 ks, I would say.

Nathan Latka

03:27So 9,000 in monthly revenue in December, this past December.

Elio Narciso

03:30>> Right. Right.

Nathan Latka

03:31Wow, this is great growth. I mean, you've almost four x over the past eight months, seven, eight months. Did you bootstrap this or raise capital?

Bootstrapped and Co-Founder Equity Split

Elio Narciso

03:37>> Totally bootstrap.

Nathan Latka

03:39That's great. Yeah.

Elio Narciso

03:41>> Thank you. Yeah. My co founder and I have experienced the pain point that we are trying to solve at Scalestack at other companies. And so, yeah.

Nathan Latka

03:50And did you just split equity fifty fifty?

Elio Narciso

03:52>> Yep.

Nathan Latka

03:54That's very nice of you.

Profit Sharing Plans and Company Values

Elio Narciso

03:57>> We, you know, like we feel that even like growing the company forward, like, you know, transparency and equity in in the form of being equitable to everybody are two key values that we want to continue. So indeed, this year we're looking into profit sharing for our employees.

Nathan Latka

04:18How many employees We

Elio Narciso

04:21>> have eight people right now.

Nathan Latka

04:23And if you did launch profit sharing, people always wonder, how would you actually structure that? How are you thinking about it?

Elio Narciso

04:28>> Yeah, I mean, we haven't figured it out yet because last year we weren't profitable, but, you know, like I would say that I create like tiers, this is what I'm thinking, tiers of profit sharing depending on like how long the person has been at the company, so how long has been able to impact the business, and then company performance.

Nathan Latka

04:53Measured by what?

Elio Narciso

04:55>> Measured by the metrics that we look at are renewals, meaning switching from the trial to the annual contract, or extensions, or upselling. So all of those are the metrics that we look at.

Churn: One Customer Lost Since Inception

Nathan Latka

05:13What is churn today?

Elio Narciso

05:16>> Well, since inception, mean, like in having these 12 customers, one customer has left. And

Nathan Latka

05:24On a revenue basis, though, how much churn is that?

Elio Narciso

05:28>> That was one of the smallest customers. So what we've learned from that is that like companies that are like, you know, seed stage to series A stage, so they haven't yet hit product market fit, are like really tough.

Nathan Latka

05:45But how much revenue were they paying? A grand a month, $2k a month, more?

Elio Narciso

05:49>> Yeah, less than 2. Less than 2.

Nathan Latka

05:50Okay, got it. So grand a month is, you know, what you were at that time, like $10.20 grand. So, okay, Interesting. And do you have expansion revenue? And if so, what what do you upsell metrics do you, like upsell against? Number of seats, number of leads, something else?

Elio Narciso

06:03>> It's a combination of, seats for our Chrome extension feature. And then it's like on top of that, it's, you know, different data sources that we can activate for our customers and different APIs to facilitate the injection of the data that we provide into existing workflows. The way we look at our product is similar to Zapier, so like, you know, they create workflows for simple processes that people need to do, like, you know, take like

Nathan Latka

06:37Yep, we understand.

Elio Narciso

06:39>> Right, so then we do that for B2B sales data. Take like LinkedIn data, enrich it with some of the PitchBook or Crunchbase and then like create and add the scoring system to see how close that company resemble one Got it. Of

07:00>> your And that requires technology of eight people on the team.

Nathan Latka

07:03How many are engineers?

Elio Narciso

07:05>> Three.

Nathan Latka

07:06Three. Okay. Any sales reps?

Elio Narciso

07:09>> No. We're just selling.

Growth Path to $100K and $300K Per Month

Nathan Latka

07:10No. Just you. Alright. Good. And so so how do you go from where you are today to, you know, call it $100k a month or $300k a month?

Elio Narciso

07:20>> Well, I mean like $100k right now, like seems, you know, within reach with our current pipeline in the next, I would say six to nine months. And then for the 300, I think it really depends on how well we can grow the existing customer basis. Our top customer has like now doubled the size of their monthly billing.

Top Customer Billing After Renewal

Nathan Latka

07:49What's your top customer pay per month?

Elio Narciso

07:53>> With the renewal, they're now going to pay $7,200 a month.

Nathan Latka

07:58Okay, that's great. Yeah, that's really good. Very cool. So what's the next product line here? I mean, this is something that, you know, people would argue data is a commodity today. You're making money on it right now, but what's the next product line?

Next Product Line: Tools on Top of Data

Elio Narciso

08:11>> It's all about like, I mean, tools that you build on top of the data. I agree that data is a commodity and so like, but what you do with that data and how can you integrate that data into existing workflows is where like we see the value that we can generate. I mean, like something as simple as the scoring system, know, scoring as in like, is this account close to my ideal customer profile, generates tremendous value

08:39>> for our customers because, I mean, their salespeople can start targeting from like the highest scoring companies and then go down the list.

Plans to Stay Bootstrapped

Nathan Latka

08:46Yep, yep, totally understand. Well, we're going to watch closely as you go build that, hopefully keep scaling, doubling revenue. Any plans to raise capital or you want to stay bootstrapped?

Elio Narciso

08:54>> Not for now. I mean, eventually, yes, but not for now.

Nathan Latka

09:00Alright. I

Elio Narciso

09:00>> think that we're fine like we are.

Famous Five Rapid-Fire Questions

Nathan Latka

09:02On that note, Elio, let's wrap up with the famous five. Number one, favorite book.

Elio Narciso

09:08>> Guns, Germs and Steel.

Nathan Latka

09:11Number two, is there a CEO you're following or studying right now?

Elio Narciso

09:17>> I'm studying like, the career of Jeff Bezos. I'm reading the book that they, you know, recently released.

Nathan Latka

09:24Number three, what's your favorite online tool for building the business?

Elio Narciso

09:29>> We like Lemlist a lot, I would say that.

Nathan Latka

09:34Number four, how many hours of sleep do eat every night?

Elio Narciso

09:38>> Six and a half.

09:40>> Okay.

Nathan Latka

09:41And situation, Elio, married, single kids?

Elio Narciso

09:43>> Married with kids.

Nathan Latka

09:44How many kids?

Elio Narciso

09:46>> Two, one upcoming in October.

Nathan Latka

09:48Oh, very exciting. And how old are you?

Elio Narciso

09:51>> I'm 46.

09:52>> 46.

Nathan Latka

09:53Last question. What's something you wish you knew when you were 20?

Elio Narciso

09:59>> Have more fun.

Nathan Latka

10:02Guys, there you have it. Scalestack.io, helping you understand and get custom B2B data right at your fingertips, your sales team fingertips so they can be more effective. They went from $9,000 a month, you know, recently up to now $40,000 a month, about a $500,000 run rate, all bootstrapped 12 customers, team of eight, three engineers they're not raising. We will see what they do next into our product line. Elio, thanks for taking us to the top.

Elio Narciso

10:25>> Thank you, Nathan.

Nathan Latka

10:28One 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

10:53Central. 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

11:15fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna 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 up

11:37for 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 people. We

11:57got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. All right. I'll be in the comments. See you.