[00:00] What's up, guys? My guest today is Tom Givi. He's the co founder and CMO of the BOT platform, a no code enterprise software solution that empowers people to build a better employee experience on internal communication platforms such as Microsoft Teams and Workplace from Facebook. Tom, you ready to take us to the top? [00:14] >> Absolutely. [00:15] Well, okay, so tell me more about this. What are people paying for this? [00:18] >> They are paying for the ability to easily build their own work tools. So using the bot platform, our customers can easily build their own bots, bespoke work applications, digital assistants, and automated workflows. As you said, they can connect these to the internal communication channels that their staff are already spending their time on. So this might be Microsoft Teams that has two fifty million plus users. It might be channels like Workplace and Facebook, which is an amazing [00:49] >> product that has been built by the team over at Facebook, or soon to be any web based interface they want using one of our API interaction endpoints. [00:58] So who are you selling to HR? [01:01] >> Yeah, we are selling to employee experience professionals. So that's HR, internal comms, you know, people, HR teams, that kind of stuff. [01:09] And what are they paying on average per month to use the tech? [01:13] >> So it ranges, we base our license fee, it's like a twelve month license fee and the price they pay depends on the size of the company. We have some customers that pay us $1,400 a month all the way up to others that are paying upwards of $1,520,000 a month. [01:28] Is that your biggest customer, 240,000 a year? [01:31] >> Yeah. [01:32] Wow, okay, interesting. When did you launch? What's the backstory? [01:35] >> Backstory is interesting. So we launched in 2016, but at the time we were actually focused more on messenger bots, like, you know, the whole chatbot craze from a few years ago. So, we were actually an original Messenger launch partner. We launched one of the first bots on Facebook Messenger. It was actually the first bot for the music industry for one of the biggest DJs in the world. There was a huge amount of buzz around that and [01:58] >> we had a lot of brands and entertainment clients getting in touch and we thought it was really interesting, but we started to have a few concerns about how cluttered the market was, but also we actually thought that the benefits of automation for our clients, even though they were getting huge benefits from the tools they were building, we actually thought that the benefits would be far better to be used internally rather than externally. So, we kind of [02:21] >> pivoted about a year or so later and we kind of ran the like BetaWorks experiment on the side to see if our customers would also get value from building their own automated work tools on Workplace and Facebook. And because we were already a messenger partner, we could actually kind of plug our software directly into workplace without actually having to rebuild too much of it. [02:43] Is that your first 100 customers is from the workplace, like app exchange listing? [02:48] >> Kind of, yeah. It's not the way our platform works, it's not really like an app that you download. It's like, you know, it's very much like B2B enterprise software that you would then connect to your workplace instance or to [02:59] your How [03:00] first 100 users though? Were they called out reaching people or did Facebook send these people to you? [03:04] >> I think at first it was probably channel promotion through those partners. So through Facebook, you know, they were a big fan of ours and what we were doing on Messenger and they were really interested to see if, you know, the benefits of bots and automation could also be applied to this workplace Facebook tool that they were building as [03:23] and who else? [03:24] >> What was that, sorry? [03:25] Who was the second channel partner? [03:27] >> Microsoft Teams. [03:28] Microsoft, interesting. Who sent you more early customers? [03:31] >> Well, we've only been working on Microsoft Teams for the last six to nine months or so, so definitely Workplace. [03:38] I see, okay. How many customers today use the platform? [03:41] >> Around 35. [03:43] 35, so very much an enterprise motion. Now, can I take 35 times that $1,400 minimum ARPU because you're doing like $50,000 a month right now in revenue? [03:50] >> No, we do much more than that. So our annual revenue is just under 2,000,000 and our MRR is $100,100 And and and 10 if you notice there's a difference between that, that's because as well as charging for license, we also have service revenue on top of that. So some of our customers, for example, pay us to [04:08] Like don't like charging service revenue, it hits their valuation, VCs hate it. Why do you guys do the services revenue? [04:14] >> We actually find that for some of our customers, you know, they might be a bit time poor, they maybe have an urgent use case that they wanna launch. And so if they wanna pay us a bit of money to help build that for them, that means that we can get them off to a quicker and better start. So, we actually find that in the instances where some customers pay us a bit of money to build a [04:34] >> couple of bots for them at the beginning, they get some really good success stories really quickly. That also then gives them a bit of time if they have some urgent use cases, they don't need to worry about learning how to use a new platform, a new tool, they can let us do that for them while simultaneously training their team and then within a few weeks when they're much more comfortable with using our platform themselves, they can [04:55] >> just go off to the races and build whatever they want. [04:58] And if you're at $110,000 today in SaaS revenue, where were you about a year ago? [05:03] >> Maybe around 70, maybe. [05:08] 0, something like that. Okay, [05:09] >> I can give you some other growth stats. I mean, cash and receivables were up 81% year on year. Last month, our invoicing is up 130% compared to last year. [05:22] Yep. Interesting. Talk to me about capital. Have you guys raised or you're bootstrapped? [05:27] >> Bootstrapped. [05:27] Oh, I love that. Are you thinking about raising or no? [05:30] >> We toyed with the idea of raising about a year Well, I'd say about two and a half years ago maybe. And we actually decided that it might be much more valuable for us to spend that time that we would invest into raising to just invest into growing the business and trying to generate sales. And that's what we did and it worked out. So yeah. [05:50] Well, it's Grammy. Do you remember back in 2016, how custom one off work did you do setting up manual bots? Because I imagine that revenue probably funded the rest. [05:57] >> Yeah, basically that's what we were doing. We were using our messenger business to fund our kind of internal enterprise business. So, we were doing a lot more service work. So, as you can imagine, there were like companies or ad agencies who would have budget to do some digital activation. Quite often these would be like short term campaigns as well. So, it might only be like a three month or a six month campaign. The way we work [06:21] >> now with customers is, you know, once we're a part of their tech stack, they don't leave. Know, How we take the [06:29] much service revenue did you do in 2016? Do you remember? [06:32] >> Oh, no. I can't remember the exact numbers, but I mean, a lot yeah. It was a lot more heavily skewed to service revenue versus license. [06:40] Right now we're like $500 in 2016. [06:42] >> It's probably closer to a $100 than $500 back then. [06:46] 100 ks like professional services building these custom bots, you use that to fund the internal development of the SaaS tool. Now the SaaS tool is 1,200,000 run rate, you're doing about 800,000 a year in professional services. [06:55] >> Yeah. [06:55] That's great. Interesting. Okay. So Bootstrapped, which we love, talk to me about the cap table today. How much do you still own? [07:02] >> Pretty much all of it. Mean, as I said, we haven't taken any- 1%. What was that, sorry? [07:07] Personally, 100%? [07:09] >> No, no, no. So there's myself and then I have a number of other co founders as well. So there's myself and there's three other co founders. All of our employees have some equity as well, but yeah, we haven't given a huge portion of equity away to any investors or anything. [07:23] How much are the co founders on altogether, the four of you? [07:27] >> 75% maybe. [07:29] Okay, good. So you've given about 25% to team members? [07:32] >> No, no, we've given less than that. There's then, at the moment, there's a load of like unassigned equity that we were going to use for future employees or if we did want to raise, but that's currently just set there as un assigned. So in theory, that would be split between however we wanted to split that. Yeah, yeah, yeah. How [07:50] much do team members currently actually own? [07:53] >> Maybe like [07:56] >> 8%, 10% maybe, maybe less. [07:59] Okay, cool. So there's 15 that's like unallocated where if you don't use that, you'll split it back up. 75 co founders, 10% employees, 15% unassigned. Guys, the beauty of bootstrapping, you keep control, you keep equity, we all love this. [08:11] >> Absolutely. [08:12] All right, Tom, if someone offers you guys $6,000,000 all cash upfront, do you sell? [08:16] >> Absolutely not. [08:17] Why not? You said that very quick. [08:19] >> No way, no way. The business we're in is absolutely booming. You know, employee experience previously, you know, was always an interesting area to be in. I think the pandemic and what's happened to the future of work over the last two years has put a huge impetus on the importance of ensuring that companies and their employees have the right technology tools. We think the way we're going, it's going to be going much, much bigger in the future. [08:42] >> Definitely wouldn't be interested in a $6,000,000 acquisition. [08:44] What would you value yourself out today? [08:47] >> We did a very small fund a while ago, and I think that officially valued [08:53] >> us at £4,000,000 How much did you raise? About 300,000. [09:00] Okay, so 300 and that was last year? [09:02] >> No, that was like four, three and a half, four years ago maybe. [09:07] Okay, got it. So you're not fully bootstrapped? [09:10] >> It's miniature, maybe, maybe, yeah. It depends how you want to define bootstrapped. I mean, we obviously, you always read about these people bringing in millions and millions of investment and all that kind of stuff. It was kind of like friends and family and maybe some small local investment companies that were involved. [09:26] So they own a portion of the equity then too, right? So what would that fall in? You just told me 75% of founders, like where would they fall in? [09:36] >> So I think that at the moment, if I brought up the cap table, would probably be maybe 10% ish or maybe a bit less. [09:42] Got it. So employees own 10%, they own 10%, the investors, and then you guys basically own the rest. [09:48] >> Yeah, but some of that 10% for employees isn't allocated yet. So there's for that then means that when we're bringing on future hires, for example, that there's still a portion in there that we can assign to them. [09:59] How many on the team today? 16. 16. How many engineers? [10:05] >> Five. Okay, [10:07] and any sales reps that carry a quota? [10:10] >> Yes, so we have three sales reps and How they're hiring at the [10:15] do you figure that out? [10:16] If I apply right now for that role, your open AE role, what quota are you gonna give me on day one? [10:21] >> That would probably be a question more for my head of sales. It depends on, yeah, it depends on the number of things and the role we're bringing them in for really. [10:30] Okay, that three quota carrying reps, interesting. And churn's obviously critical. What's your churn look like today? [10:36] >> Our monthly churn at the moment is 2.9%. [10:40] Okay, is that good or bad? [10:42] >> I think that's pretty good. I think it wasn't the benchmark. A good benchmark is 3% to 5% a month maybe. [10:48] Do you have expansion revenue or no? Yes. How much? [10:54] >> It's 118% is what our Where is that? Yeah. [11:00] So you have about If you have that net, that means you're turning 36, you're expanding 54% for net of 118 net dollar retention. Yes. What are you upselling? Is it feature based, seat based, something else? [11:12] >> It's probably like usage based. So, you know, a company might get in touch with say maybe 50,000 employees and we might go in at the beginning with a certain pricing model. They then use the platform more and more and then we're able to upsell them over time based on effectively value based pricing. [11:30] Interesting. What is that use? Is it number of bots, number of messages, number of API calls? [11:36] >> I mean, it depends really on what's important to the customer. For a lot of our customers, it might not necessarily be something purely numerical, like the number of bots they have or the number of people interacting with them, but things like the ROI it's generating for them. For example, we had one client who at the end of their year one, they told us that they could calculate that they generated a 15.6 times ROI based on what [11:57] >> they were paying for. [11:58] That's really complicated to have every customer apply that and to get direct attribution. What do you guys price? Like, what's the utility metric you price against? [12:06] >> Our pricing would probably be based on usage in terms of a mixture between how many bots they have and how many people within the company are regularly using those. [12:15] Okay, so seats and number of bots. Yeah. Yeah, interesting. Okay, very good. Let's wrap up with the famous five. Number one, favorite book. [12:22] >> Okay, so my favorite book is a book called Get a Grip on Your Business. That might be a bit of a weird answer, I'm not sure. It's by a guy called Gino Wigman. It's like a business strategy book that helps entrepreneurs kind of gain control of their business through this thing called EOS, which is an entrepreneurial operating system. Got recommended that by a fellow friendly co founder a few years ago, and it's made a huge impact [12:46] >> on our business. [12:47] Number two, is there a CEO you're following or studying right now? [12:51] >> Andrew Gazzdecki of MicroAcquire. I'm a big fan of everything he's doing at the moment to disrupt the startup acquisition industry. He's bigging up bootstrappers, And I think his promo videos with Russ Hanneman from the TV show Silicon Valley is probably the best use of Cameo I've ever seen. [13:08] Number three, what's your favorite online tool for building your business? [13:11] >> HubSpot. And HubSpot's awesome. [13:14] Number four, how many hours of sleep do get every night? [13:17] >> That depends, maybe weekdays, probably about seven, weekends I try and have a bit more sleep, maybe nine unless Arsenal have an early game in the morning, in which case I'm probably up by 7AM and miserable by 9AM. [13:29] Okay, fair enough. And what's your situation, married, single, kids? [13:32] >> Married, no kids. [13:33] No kids. How old are you? [13:35] >> 36. [13:36] 36, last question. Something you wish you knew when you were 20. [13:40] >> Buy Bitcoin, Apple and Tesla stock and never sell. [13:44] Guys, there you have it. The Bot platform launched in 2016, did about a $100,000 in consulting revenue before scaling our SaaS business. Today, that SaaS business is a $110,000 a month, up from $70,000 a month just a year ago, but the full business is about $2,000,000 a year right now, about 800,000 of that is consulting revenue, 1,200,000 pure SaaS. They've only raised $300,000 back in, call it, 2018 at a $4,000,000 valuation. Founder's still in the majority [14:05] of the business. Tom, thanks for taking us to the top. [14:08] >> Thank you very much. [14:11] One 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 [14:36] Central. 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 [14:58] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to 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 [15:20] up for that at nathanlakka.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. [15:39] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.
