How Strattic CEO Miriam Schwab grew to $18K revenue and 30 customers in 2019.

hello everybody my guest today is miriam schwab and over the past 12 years she founded and built a leading global open source web development company taught herself how to code and became one of the top thought leaders and influencers within the israel sorry the israeli startup and open source spaces in mid-2016 feeling the need to create something revolutionary in order to protect the internet in a completely new and massively scalable way she founded strategic her lifelong passion for helping people and doing good in the world has translated into strategic mission and technology making web security simple and accessible to all miriam are you ready to take us to the top i'm ready all right what is the state of kind of open web and fairness in is israel right now uh well open source is used a lot and even increasingly by government um so there's a lot of support and activity in the open source community including open sourcing information like governments information public information uh so there are a lot of people working on that um in terms of the open source communities uh there's different ones that have different levels of activity i would say that the wordpress community is probably one of the more active ones since we have our annual well kind of annual word camp conference here it had hasn't happened for a few years but hopefully it's happening soon um and and uh there's forums and uh facebook groups and meetups all on these topics we organize the local jerusalem wordpress meetup um very good and and so let's let's dive in here so talk to us about stratix what's the company do specifically and how do you guys make money okay so stratix takes content management system based websites like wordpress and one click converts them to something called static or serverless which means we completely remove the database the processing server and everything and serve up what's essentially a snapshot of the site okay and it's just a collection of static files html css javascript functions exactly the same um the benefit of doing that is wordpress is the by far the largest platform being used on the web no other single platform comes close and continuing to grow however architecture starting to show its age it was initially architected like 15 years ago and so people suffer from speed issues sites are slow or security you know vulnerabilities um by converting the sites to static we solved all of those issues basically in one go the site's virtually unhackable and we've seen sites go anywhere from two times as fast 20 times as fast without changing one single line of code so that um a solution that is basically usable by anyone um it's not complex for people that are not technical help me understand what that actually means so like like are you caching basically these sites and then essentially sticking them i mean that's what allows you to make them static so it's essentially like the ultimate cache every single page is a static rendering of itself and there's no communication with the database so if you view a regular site your site um is on wordpress exactly yeah and every time someone views a page on it they're essentially querying the database to get the content in their browser uh without with like there's no need to set known to process the php insurance html and all the security and points issues are gone but it functions exactly um and so let me ask you a question um if someone uses your site like if i use you and when my blog post now is cached and it doesn't actually have to hit the whatever the back end like read the file when a new user hits it do i still get the google juice and the seo from that blog post if i'm on you yeah so uh my background's also an seo um and so it's very important to us and we you retain all of your seo authority that you currently have but our clients also might see a boost because the sites are now faster that um you know google tends to put a lot of value on that and so that can increase the authority of the site once the site starts to load um much faster than it was before but in terms of like the what google sees before a site on stratoc and after exactly the same html so from google's point of view they can't tell that the site architecture has changed we did an interesting experiment with google we onboarded a site had malware the site owner didn't realize that we did once we operated it instead of cleaning up the malware we just printed it out printed it we published it as a static version and then we resubmitted it to google because google has started to market as malware yep um having malware we submitted it to google and we said it's clean and google was like yep it is because once we removed the database which was where it was infected um the site loaded fine and uh that site was re-indexed by google that's good okay it makes perfect sense talk to me about how you're making money here so is it is it a pure place sas revenue model or what yeah so it says um we're essentially um the next stage in hosting so uh it's we're like in line with the managed hosting uh market in terms of pricing um so so what if you don't if i'm asking what are people paying on average per month for this so on average it's somewhere between 50 and 100 per month right now because of the size of sites that we're onboarding okay they're very affordable yeah very important very important any better put this on a timeline for me when you launch um we launched uh in december um we started to onboard client then um this is december 2018. yeah exactly um we incorporated in january 2018 and we launched in december 2018. uh after launching we saw that we were having some issues so we actually went back to a private beta so now users sign up to our site and we're kind of selecting one by one more or less who are onboarding okay so how many how many customers are you serving today then about uh miriam you were cutting in and out you said 30. yeah like over 30. okay about 30. that's good okay so so you're uh tell me about the issues you ran into where you had to go back to kind of having it being a closed beta um okay so the issues that we ran into were as follows one of them was scaling so uh what we found was the publishing process the static demanded more resources than we had planned for um in terms of the architect our our own platform architecture so we had to revisit that and actually sped it up tremendously now which is amazing also the publishing process was taking too long which was painful for our users uh if you use a standard standard static site generator which are becoming popular now um like hugo or jekyll publishing a full site can take like a half hour an hour even sometimes two hours and we don't want to be that so we now cut it down and also our users aren't used to that they use wordpress they click publish it's instant so we want the experience to be very similar so basically you now had to go back private so that you could really handhold on the onboarding and once you figure out how to productize the handholding then you'll open it back up to the public without having to okay very good so 30 customers today times 50 bucks a month you're doing about 1500 bucks a month right now on revenue and you were doing zero a year ago right yeah and and what were you so um how did you get i mean what growth channel did you use to get the first 10 customers um so my background is in wordpress and i am very well connected to the wordpress community but also to many tech companies startups in israel are very active here so also from my previous agency before i found a stratic um we worked with also like the top companies in israel and also some overseas and uh once we opened up stratix it's been actually really easy to get clients that's not that hasn't been hard for us we have over almost 650 just waiting um to be onboarded right now who signed up for our sites to to join stratix and people are signing up every day so there's a need um thanks to our connections well miriam no no sorry sorry so be specific so you say you really will connect in the wordpress space like literally how did you sign up the first customer where did you search on the wordpress forum or like where did conferences you go to where how'd you sign them up um so i speak at um i spoke at wordcamp europe twice uh like over like 2017 2018 also previously but most recently where i did mention stratix only mention it um and then i spoke at wordcamp us in nashville now in december so that's kind of where we launched uh we launched around that um i am regularly on podcast i'm interviewed on blogs and i post i have a pretty active online profile and am generally connected to influencers kind of um and so people have it's word of mouth i mean it's been word of mouth well no i mean it's word of mouth because people love you i can see why but you still have to hustle to get people to whip up the credit card and pay so like how are you going from speaking on the word camp europe stage casually mentioning it to getting one of the people in the audience to say yes i love this i'm going to start paying 50 bucks a month i know it sounds weird but it's really not hard because everyone in this field feels the pain like if someone in the work camp audience is a developer or website builder means that they are dealing with the pain of keeping their sites their clients site fast or listening to their client complain about it or keeping their client site secure it's an ongoing battle you can't ever rest and they hear this and they get it especially if they're developer oriented um because developers dream of using static site generators actually but they can't because their clients can't code they're not going to manage a site using command line interface so they want to use wordpress the developer wants a static site generator we bridge these two worlds and then everyone's happy so it's it's really not hard i mean look i get the product marian but you have 30 customers right so it's not like the work it's not like everyone in the audience signed up because this thing makes like so much i mean complete sense i mean there it you are doing something like getting your nails dirty digging in and to convert people so how did you when you mentioned it on stage did you get any customers from that speaking event uh people did sign up yeah okay we didn't necessarily onboard them the reason we have 30 customers is because of the technical issues that we had in onboarding and we had to slow it down um but it's true those 30 customers are ones who are very eager they're early adopters who are okay with them getting their hands dirty they're okay with some bugs so how have you miriam how have you i don't mean to keep but we have 15 minutes so i'm pushing you forward to get as much of your story as possible um how would you capitalize the business you bootstrap a raise so first um i bootstrapped it for quite a while i came up with a concept already like in 2016. i joined an accelerator here um i bootstrapped it by through my previous um my agency i that's how i managed to fund myself so i could work on stratix um we got aws credits okay so have you raised any capital to date yeah so in 2018 we raised how much i didn't ask my partner if i can say but it's a pre-seed round okay hold on i mean i can just look it up real quick i'm sure it's on crunch base um it's from angels and um you see palo alto new york is israel um are we talking like more less than a million bucks we'll just keep it at a big range okay less than a million okay and what did the accelerator put in um the accelerator didn't actually put in money but they also didn't take equity which is really good uh but it but a few two of our investors came from meeting them through the accelerator um and that's what gave us the aws activate credits which is huge huge you know that's for your business it's huge it saves you a lot of money it increases your margins talk to me about your team today how many people we're seven people seven are you guys break even at this point are you still burning cash no we're burning cash we're definitely bringing cash we're raising more now um how much do you want to raise right now we're looking to raise like we're going now to move towards like a seed round of 2 million okay and why is 2 million the right number two million allows us to scale and capitalize on the pipeline that we've gotten without really doing any marketing and you'll do a note or equity you think so we did a note for the first and the next one will be equity um our investors want to convert already it just makes sense so don't don't obviously tell me what valuation you're going to be like getting in a term sheet but just tell me what would make you happy i mean what is it what is valuation or if you raised it at that valuation and make you really happy uh like 8 million yeah and so do you think i mean do you think you'll be able to get it um i didn't think we were going to be able to raise the first round so i i think we will be able yeah i mean it'll be impre it'll be impressive because like this is not a story about like an ar multiple right if i mean if you're doing 18 grand right now in a r and you're trying to get eight million pre obviously that you know the multiple and that is massive but if you can figure a way to tell the story and people buy into you obviously the valuation starts to maybe make sense right so it's a huge market the target market is like enormous well that's great but a lot of people can your competitors could say that that that's true uh yeah so it's the story it's our abilities it's our access to the market our knowledge of the market um i don't know and so so how aggressive are you being right now in terms of growth i mean when you say burning cash are you bringing 10 grand a month or 100 grand a month or what um more like 10 grand okay yeah wait no i'm just thinking in check-outs sorry no it's more than 10 grand we're like 30. 30 grand okay good and most of that's on head count it's all people yeah yeah yeah i think it's probably too early to ask these questions but like things like cac it's and your churn i mean it's too early right surely i mean we have zero turn churn but it's like yeah the numbers are too small so we don't know that yet very good all right let's wrap up here with the famous five number one what's your favorite business book i think um sprints by jake knapp i love that book sprint print uh he worked at google he wrote a book about or that he wrote a book about their sprint um approach very good numbers very practical number two is there a ceo you're following or studying oh um the ceo of monday.com which is an israeli company uh we've met with him a few times and he's talked about a hustler talking about roy yeah roy exactly yeah he's been on the show a couple of times they're obviously killing it yeah yeah and he's like generous with his knowledge but he's yeah he's killing it totally number three what is your what billing tool you guys use billing billing so unfortunately we have to use paypal because stripe is not accessible to israeli companies oh that's annoying okay number four how many hours i'll sleep to get every night like four that's not healthy no it's not i was falling asleep now at our table it's terrible what's your situation like married single kids uh married and i have seven kids you have seven okay this is why you don't get any sleep seven kids a startup married amazing okay and you mind me asking how old you are sure i'm 22. 42 okay last question what do you wish your 20 year old self knew oh wow um that no matter how hard things will get and they will get hard you can get through it you just gotta believe in that and you'll get through it guys you can get through it and this is going from a mom of seven launching her own startup in the developer community specifically to wordpress and static sites in israel team of seven right now they're burning about 30 grand a month to you know build out this vision looking to raise maybe 2 million on an 8 million pre right now got our first customers by speaking at word camp europe along with other things she's just really well connected in this industry they've got about 30 customers today paying 50 bucks a month for their tool so caught 1500 bucks a month again in monthly recurring revenue as they look to scale miriam thank you for taking us to the top thanks for having me