How Tenon CEO Karl Groves grew Tenon to $660K revenue and 110 customers in 2019.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is carl groves he's the founder of a company called tenon.io their web access accessibility testing has a platform they're testing after the fact they seek to solve that tenant is a one-of-a-kind accessibility testing tool that is aimed at offering unprecedented flexibility and tooling for designers developers testers and content authors carl you ready to take us to the top yeah let's do it so what category do i put this in i mean it's like kind of a rainforest qa kind of concept or is it different so the idea is basically to do specialized testing uh especially functional testing in a way that can be added to other qa platforms uh and things like that things like cypress things like selenium testing automated tests to build scenarios like jenkins bamboo travis all that sort of stuff okay so who's buying this though is it the designer the developer well in our case because we're the first sas platform to do this we do have a variety of customers from small design agencies to uh small and mid-sized companies to even massive companies uh that are that are in the uh enterprise software space okay can you give me a general sense what's the average customer going to pay you per month to use your technology so we have sas plans that range from uh from 90 a month to a couple hundred dollars a month so we we do try to target people for whatever their needs are high volume customers they're gonna pay about uh eight thousand dollars a year for the sas plans up to for enterprise sales 36 000 a year for the license plus uh fees for hosting and stuff like that okay when you look at just the sas component of your business what do you think at fair averages for an annual contract value are we talking like a grand or 10 grand or 100 grand now for those for annual we're talking somewhere in that four to eight thousand dollars a year ring okay got it so 4 000 divided by 12 that's like caught 300 400 bucks a month something like that yeah exactly that one i think that mid-tier plan is like 450 or something like that okay and so when you say that people pay more based off volume what do you define volume as give help me understand the usage metrics right so we char the the fee that we charge is basically for the api calls that run the testing all the other stuff platform access reporting data archival access all that sort of stuff is free even the add-ons so we do but we are charging per api call so that would be a request for us to test a web page or even part of a page in those cases and can you give me a sense of scale so last month how many total api costs through your platform all together well a couple hundred thousand okay uh per month usually okay i mean when you how do you get up to you know 10 million 100 million apis called api calls per month uh so those would be those would be uh platform providers and stuff like that so for instance one of our customers is a company called hanon hill hannah hill has a content management system massive massive amounts of customers and so what they do is they literally test every single page every single day and those and those calls are we're talking about uh several hundred thousand uh a month just for that one customer so the idea being uh really in terms of scaling for a customer and of course scaling and business-wise for us it would be to have uh more of those customers who uh autumn automate their builds automate their qa with like nightly runs for everything or spidering their entire sites especially if they have a lot of content and okay so you mentioned hanon hill that's one customer how many customers are you serving now today uh so we have 10 000 users on the platform today uh a lot of our revenue comes from enterprise sales so those are going to be so we have about 110 paying customers uh right now yep that's great and put it on a timeline for me when did you launch the company 2014. okay 2014. that's good and do you remember i mean do you remember uh how much money you spent building the code before you had your first dollar of revenue i don't and here's why because i'm i'm not only a founder but i'm also a technologist so a lot of the code that went into this was was really code that i've been playing around for a long time and eventually i said you know what i should turn this into a product so many many many hundreds of hours that i have no way to account for right now when we went to uh when we went to the paid model well let me ask a different question when did you write your first line of code uh that would be 2012 or so okay and when did you have your first dollar of revenue 2014. okay so about two years two years of kind of tinkering coding developing yeah yeah now today have you bootstrapped the company or did you decide to raise capital 100 bootstrapped every single piece of money uh that that we make goes right back in uh and we're cash positive business that's great what's the team size look like today how many people 14 14 folks that's good how many engineers about five five okay what are the rest uh so we also offer services around the product so it's almost like uh one of the things that we end up seeing is customers say your tool found a whole bunch of problems we don't know how to fix them and so we have services around consulting training uh and even development services for those customers who need that help okay if you looked it though just last month on a pure sas basis how much revenue would you tribute to just your sas business model last month probably we're almost at a 50 50 split uh it depends on especially with the sas kind of stuff the sas is not as as uh revenue generating as the enterprise sales are so i would say all in we're probably about 50 50 maybe a little bit closer to 60 on the uh on the product side okay and it was total last month something around 30 thousand dollars so about 15 grand that was maybe sas and the other 15 services well total was a lot more than that but yeah so i would say uh i would say that we're talking about like i said about 50 to 60 percent being product yeah what i the percentages are great but you know 50 percent of a dollar is way different than 50 of 10 million a month so i'm trying to understand the math i'm doing there as you mentioned so we're talking about yeah we're talking more along the lines of 100 150 000 okay got it so if so you're saying 50 of that so about 50 000 per month you're saying it's coming in from just the pure sas business yeah that's good that's healthy so so 110 customers at 300 bucks a month is only you know 33 000 a month in terms of sas so it sounds like your your price point your average price money is probably higher than 300 bucks per month yes absolutely because like i said because of the uh because of some of the higher purchases the higher usage purchases the balance actually ends up going towards those higher price points for the specific plan so just to be clear if your last month you're talking 100 grand uh in revenue uh and you said 50 50 split between sas and professional services that would mean you've got again 110 customers paying more like an average of 500 bucks a month for 55 000 a month in about in sas revenue does that sound better yeah yeah yeah that's good where are you so where are you getting these customers from so a lot of it is word of mouth um a large amount of it is is word of mouth at this point for years before i founded the company i was a recognized thought leader in the in the uh in the field so a lot of that comes from reputation not just for me but also that that that initial uh attention to the product because of my reputation helped sort of push that snowball down how did you build that reputation though was it inside another company or how did you do it blogging and speaking appearances really um so i did i i've put out a couple hundred blog posts on the topic i've spoken on uh about four continents on the topic and so what's like the key your keynote title what if i see you speak at a conference what's your keynote likely to be called uh everything we know uh which is uh which is a breakdown of a lot of the data that we've gathered through at this point millions of api calls and and the assessment of that data uh i break that down to show what the common problems are that people have that people commit and the patterns that we see based on certain platforms and things like that okay and how did you get your first customer do you remember my first well we went into it so we went into a private beta phase uh where we had just a handful of people using it we went into a and then there was an open beta phase...