How Servoy CEO Bob Cusick grew Servoy to $62.7M revenue and 1K customers in 2024.

hello everyone my guest today is jan ellman he's an entrepreneur and the founder of servo he's got an engineering background of experience in building great software companies he's now competing in the low code platform as a service space jan are you ready to take us to the top yes i am all right let's talk about survey what's the company do and how do you make money so i started savoy 17 years ago based on the fact that i saw that developing business applications was way too difficult and taking way too much time and so what we're doing today we created a platform that makes it three to five times quicker to create business applications both for internal corporate users and for isvs so independent software vendors that create standard off-the-shelf software okay and you're a platform as a service usually platform as a service you build you know by some degree of kind of data usage or utility is it is it kind of recurring revenue yes i would say 80 of our revenue today is is recurring that's great and what do you price around what data metrics so we price uh around the usage of the of the platform so with it typically with corporate users that can be on a per per-user basis with software companies we would typically charge as a percentage of what they charge for their products so let's pretend you're a software product and you charge 10 dollars per user then our cost would be a fraction obviously a very small fraction of of third cost that makes it very easy for software companies to get started you're not investing tens of thousands of dollars to begin with the platform but you can begin at a very low cost and you're immediately seeing results by using the product versus building everything by yourself from scratch so jen let me ask you a question i'm sure you service a wide range of customers but if i asked you to give me an average what would you say the average customer pays to use your tool per month or per year that varies because we serve two distinctly different groups on the one hand corporate clients so for example here in los angeles we have ucla as a customer within the hospital they build custom software applications using survey this is typically done at the departmental level so you only have maybe 10 20 30 users there are also corporate clients that use survey site-wide so they use it for all of their software developer then you're looking at thousands of users now if you look at software companies then because they're paying a percentage uh that can also vary depending on their own size so usually in reality it's around two percent of their total revenue so let's say as a software company you're you're building 200 000 a month then your cost to server will probably be four to five thousand so typically very much in the realm of what you'd be paying to your infrastructure uh company typically but now you get a full stack so full development testing deployment integration and rapid application development tools so jan would you say kind of that five grand per month price point that's a fair representation of kind of your minimum would you say or is that closer to an average i would say that uh it's on the low end of our average if you look at isvs it's sort of on our average when i look at corporate lines i see very good okay so i wanna put this on a timeline now you said you found i wanna make sure i heard this right you said you found the company 17 years ago that's right you were ahead of your time yes we were probably too early so the first years we had a pretty tough time in in selling this how tough and even now it was it was very hard it was finding customers one by one it was marketing was very difficult and that has gotten much better in the in the past years where now the gardeners and the foresters have defined low code as its own separate market although we feel that we are a bit in the middle um so we're not entirely in the low code space because while low code is great it's not very capable of building complex business applications it's usually only used for very small point applications our platform is typically used for broader applications on the high end you you would use tools like java and and uh and dolnet with it you can basically build anything but you need a very high budget you need a lot of people to to throw at the problem we nicely fit in the middle so this used to be the 4gl space so back in the days you had all these great 4gls that you would use to build business applications and we live there so right between the code environments on the low end and and do-it-yourself platforms on the on the high end well you survived the tough part now the mainstream is kind of more open to this kind of tool and i think there's still a lot of growth ahead that being said over the past 17 years jen how many customers have you scaled to today so today we're serving a little bit more than a thousand customers um and growing at the moment so in our first years we obviously when you're growing from one dollar to two you can easily double your through your revenues in the past five years we've sort of stabilized that at around 30 percent and that's the revenue rate at which we can grow without doing external funding we may be considering in the next few years now that the market is is much larger than it used to be to do an additional funding round and we we believe that with an additional funding run we could put the growth rate back to 100 year over year and can you give me a sentence in terms of generally speaking what your ar is at today well as a as a privately held company we don't publish our our ar other than just the metrics of how we're growing and and the number of customers that we have well something i'm doing here is wrong because if i take the thousand unless unless you're gonna totally surprise me here a thousand customers times that five thousand price point which you said is on the low end of your average if i multiply those together that puts you at five million bucks a month now maybe you are at 5 million bucks a month but i'm assuming i'm doing some math wrong yes because the the corporate clients are at a little bit lower but yeah we have that we have a healthy revenue within a company but we've been profitable since 15 years as an organization well congratulations one of the reasons yeah thank you it's and it sounds like you're bootstrapped today as well well we did one funding round in 2008 so this is 10 years ago and the idea then was in 2008 we will need a lot more funding rounds but so far we didn't have to uh to do any so so how much is it how much to date raised 1 million in in external financing everything else by the founders okay well that's good look i i think with under well i'd say i think 100 million considering you're in california you still can kind of wear your bootstrapped hat right yes what's the team size today how many people so worldwide we're with uh one uh close to 100 people today that's great and you said worldwide so i'm assuming everyone's remote so in the us we have a pretty small team because we only have a sales and implementation organization i started the company back in amsterdam and i moved here three years ago to help grow the us organization so the headquarters is still in in amsterdam but if you look at new arr then the us is now u.s and canada across the the fastest growing market we're going quicker than than europe that's great walk me through some of the other economics here in terms of keeping your customers you know more more kind of pa you know platform service companies are coming to the market how sticky is the product and obviously the way to measure that is churn what's your turn today and how do you keep that low so our tune today is less than three percent um that's a load over per month the the churn per year is three percent yeah but is it logo or revenue it is revenue and logo okay that way if your revenue if your revenue and logo churn are equal that means that basically all your customers pay the exact same amount which i know is not the case yeah i'm i'm sorry i made a mistake that's our revenue churn is negative um so a lot of current customers are growing our logo revenue has been fairly stable at three percent in the past years sorry i i have to ask better questions i meant your gross so you can't have net negative revenue churn if you're only looking at gross so you're adding back expansion obviously there but if we just look at your gross revenue churn is that what one or two or three percent something like that three percent yeah okay it is three percent revenue churn yes okay so so what that tells me if you're since your revenue churn is basically equal to your logo churn uh you're not seeing you know churn in one cohort in other words not just your expensive customers or not just your cheap customers or our churning they're kind of equally churning no matter what cohort they're in that's right yes yeah so we typically see churn at the at the start of uh getting a new customer on board uh once you're or into the platform once you've developed a bunch of applications the stickiness is is very good also because you would have to redo your your applications and for us obviously we have to stay up to date you know the moment we don't keep our platform up to date with uh like three years ago we had to go to html5 so we had to basically redo a lot of parts of the platform to...