How The Bot Platform CEO Syd Lawrence grew The Bot Platform to $2.9M revenue and 35 customers in 2024.

Bot building SaaS hits $1.2m ARR with just $300k raised - YouTube

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Transcript

(00:00) what's up guys my guest today is tom gibby he's the co-founder and cmo of the bot cloud from 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're ready to take us to the top well okay so tell me more about this what are people paying for this they are paying for the ability to easily build their own work tools um so using the bot platform um our customers can easily build their own bots uh (00:28) bespoke work applications digital assistants and automated workflows um 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 you know 250 million plus users um it might be channels like workplace and facebook which is an amazing product that has been built by the team over at facebook um or soon to be any web-based interface they want using one of our api interaction endpoints that will be loaded so who are you signing into hr (01:01) yeah we are selling to employee experience professionals so that's hr internal comms you know people um hr teams that kind of stuff and what what are they paying on average per month to use the tech so it ranges we base our license fee it's like a 12-month license fee and the price they pay depends on the size of the company we have some customers that pay us 1400 a month all the way up to others that are paying upwards of 15 20 000 a month is that your biggest customer 240 000 a year uh yeah wow okay interesting when did you launch what's (01:34) the back story 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 um so we were actually an original messenger launch partner and we launched one of the first bots on facebook messenger it was actually the first spot for the music industry for one of the biggest djs in the world um we there was a huge amount of buzz around that and we had a lot of you know brands and and entertainment clients getting in touch (02:03) and we thought it was really interesting but we started to have a few concerns about how cluttered the market was um 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 pivoted um about a year or so later and we kind of ran the like beta works experiment on the side to see if our customers would also get value from (02:30) building their own automated work tools on uh workplace and facebook and because we're already a messenger partner um we can actually kind of plug our software directly into workplace without actually having to rebuild too much of it is from the workplace like app exchange listing uh 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 your first hundred users though uh were you (03:02) called outreaching people or did facebook send these people to you i think at first it was probably um channel channel promotion through those partners so through facebook um you know they were a big fan of ours on 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 um that they're building as well what was that sorry who was the second channel partner uh microsoft teams microsoft interesting who sent you more (03:30) early customers well we've only been working on microsoft teams for the last six to nine months or so so definitely workplace i see okay and how many customers do they use the platform uh around 35 35 so very much an enterprise motion now can i take 35 times that fourteen hundred dollar minimum rp there's been like fifty thousand bucks a month right now on revenue uh no we do much more than that so our annual revenue is just under two million and our mrr is 110 110k and if you notice there's a difference between that that's because (04:02) as well as charging for license we also have service revenue on top of that so some of our customers for example pay us like don't like charging service revenue it hits their valuation vcs hated why do you guys do the services revenue we actually find that for some of our customers you know they might be um a bit time poor they maybe have an urgent um use case that they want to launch and so if they want to pay us a bit of money to help build that for them that means that we can get them um off to a quicker (04:28) and better start so we actually find that in the instances where some customers pay us a bit of money to build a 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 you know 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 (04:54) platform themselves they can just go off to the races and build whatever they want and if you're 110 000 today in sas revenue where were you about a year ago um maybe around 70 maybe zero something like that okay i could give you i can give you some other growth stats i mean cash and receivables were up 81 year on year um last month our invoicing is up 130 compared to last year yep interesting um talk to me about uh about capital have you guys raised or your bootstrapped bootstrapped ooh i love that are you thinking about raising (05:30) or no we toyed with the idea of raising um 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 um and that's what we did and it worked out so yeah well it's great do you remember back in 2016 how much custom one-off work did you do setting up manual bots because i imagine that revenue probably funded the rest yeah basically that's what we were (05:59) doing we were using our messenger business to fund our kind of internal enterprise business um so we were doing a lot more service work so you know as you can imagine there were like um 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 um the way we work now with customers is you know once we're a part of their tax their their tech stack they don't they don't leave so you know they're (06:28) technically obvious how much service revenue did you do in 2016 do you remember 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 licensing or like 500 grand in 2016. it was probably closer to 100 grand than 500 grand back then 100k like professional services go to these custom bots you use that to fund the internal development of the sas tool now the sas tools 1. (06:53) 2 million run rate you're doing about 800 000 bucks a year in professional services yeah that's great interesting okay so bootstrapped which we love talk to me about the cap table today how much do you still own uh pretty much all of it i mean as i said we we haven't taken any what was that sorry personally 100 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 um all of our employees have some equity as well um but yeah we we haven't you know given a huge portion of (07:22) equity away to any investors how much are the co-founders on all together the four of you uh 75 maybe good so you've given about 25 to team members uh no no we've given less than that there's then uh uh there's 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 um but that's currently just set there is unassigned so in theory that would be split between you know however we wanted to spread that yeah yeah how much team members currently actually (07:52) own uh maybe like maybe like 8 10 maybe maybe less okay cool so there's 15 that's like unallocated where if you don't use that you'll split it back up but 75 co-founders 10 employees 15 unassigned guys the beauty of bootstrapping you keep control you keep equity we love this absolutely all right thomas if someone offers you guys six million dollars all cash up front do you sell absolutely not why not you said that very quick no way no way the the business we're in is absolutely booming you know employee experience uh previously you know was (08:26) 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 per 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 definitely wouldn't be interested in a six million acquisition would you buy yourself out today um we did a very small fund a while ago and i think that officially raised us at four million that officially valued us (08:54) at four million pounds how much did you raise uh about three hundred thousand okay so 300 and that was last year uh no that was like the four three and a half four years ago maybe okay got it so you're not fully bootstrapped it's it's it's miniature maybe maybe yeah it depends how you wanted to find bootstraps 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 a friends and family and maybe some small local investment companies (09:25) that that were involved so they they own a portion of the equity then too right so what would that fall on you just told me 75 of the founder like where would they fall in 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 got it so employees are in 10 they own 10 the investors and then you guys basically own the rest yeah but some of that 10 for employees isn't allocated yet so there's a fee that then means that when we're bringing on future hires for example that there's still a (09:58) portion in there that we can assign to them how many on the team today 16 16 how many engineers uh five okay and any sales reps that carry a quota uh yes so we have three sales reps and we're hiring at the moment how do you figure that out if i apply right now for that role your open ae role what what quarter are you gonna give me on day one uh that would probably be a question more for my for my head of sales um it depends on yeah it depends on the number of things and the role we're bringing them in for really okay but three quarter carrying (10:32) reps interesting and turns obviously critical what's your turn look like today um our monthly churn at the moment is 2.9 okay is that good or bad i think that's pretty good i think wasn't the benchmark a good benchmark is three to five percent a month maybe do you have expansion revenue or no uh yes how much um uh it's 118 percent is what our um where is that yeah so 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 (11:10) feature-based seed-based something else 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 um with a certain uh pricing model they then use the platform more and more um and then we're able to upsell them over time based on effectively value-based pricing interesting what is that use is it number of bots number of messages number of api calls um i mean it depends really on what's important to the customer you know for a lot of our customers it might not (11:41) necessarily be something purely numerical like the number of bots they have or the number of people interacting them but things like the roi it's generating for them for example we have 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 they were paying for that's really complicated to have every customer like apply that and to get direct attribution what do you guys price like what's the utility metric you price against our pricing would probably be based on (12:08) usage in terms of a mixture between how many bots they have and how many people within the company are regularly using those all right so seats and number of bots yeah yeah interesting okay very good let's wrap up with the famous five number one favorite book okay so my favorite book is a book called traction 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 um kind of gain control of their (12:35) business through this thing called eos which is an entrepreneurial operating system we start we got recommended that by a fellow friendly co-founder a few years ago and it's made a huge impact on our business number two is there a ceo you're following or studying right now uh andrew gazdecki of microacquire uh i'm a big fan of everything he's doing at the moment to disrupt the startup acquisition industry he's bigging up bootstrappers uh and i think his promo videos with russ hanuman from the tv show silicon valley is probably the best (13:06) use of cameo i've ever seen number three what's your favorite online tool for building your business hubspot and that's what's awesome number four how many hours i sleep to eat every night uh 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 okay fair enough and what's your situation married single kids married no kids okay it's how old are you 36 36 last question something you wish (13:38) you knew when you were 20 uh buy bitcoin apple and tesla stock and never sell guys there you have the platform launched in 2016 did about a hundred thousand dollars in consulting revenue before scaling their sas business today that sas position is 110 000 a month up from 70 000 a month just a year ago but the full business is about 2 million a year right now about 800 000 of that is consulting revenue 1. (14:00) 2 pure sas they've only raised 300 000 bucks back in 2018 at a four million dollar valuation founder still in the majority of the business tom thanks for taking us to the top thank you very much one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 (14:32) and make a deal live it is fun to watch every thursday 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas world whether it's an acquisition a big fundraise a big sale a (15:00) 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 sas 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 for that at nathanlacka. (15:23) com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 gotta push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya