How The Bot Platform Reached Just Under $2M Annual Revenue and 35 Enterprise Customers on £300,000 Raised (Interview with Co-Founder Tom Gibby)

Introduction and Product Overview

Nathan Latka

00:00What's up, guys? My guest today is Tom Gibby. 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?

Tom Gibby

00:14>> Absolutely.

Nathan Latka

00:15Well, okay, so tell me more about this. What are people paying for this?

Tom Gibby

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.

Target Customer and Pricing Model

Nathan Latka

00:58So who are you selling to HR?

Tom Gibby

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.

Nathan Latka

01:09And what are they paying on average per month to use the tech?

Tom Gibby

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 $15,000 to $20,000 a month.

Nathan Latka

01:28Is that your biggest customer, 240,000 a year?

Tom Gibby

01:31>> Yeah.

Nathan Latka

01:32Wow, okay, interesting. When did you launch? What's the backstory?

Tom Gibby

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

Company Founding and Messenger Bot Origins

Tom Gibby

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.

Nathan Latka

02:43Is that your first 100 customers is from the workplace, like app exchange listing?

Tom Gibby

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

Nathan Latka

02:59your How

Early Channel Partners and First Customers

Nathan Latka

03:00first 100 users though? Were they called out reaching people or did Facebook send these people to you?

Tom Gibby

03:04>> I think at first it was probably channel promotion through those partners. So through Facebook, they were a big fan of ours and what we were doing on Messenger and they were really interested to see if the benefits of bots and automation could also be applied to this workplace Facebook tool that they were building as

Nathan Latka

03:23and who else?

Tom Gibby

03:24>> What was that, sorry?

Nathan Latka

03:25Who was the second channel partner?

Tom Gibby

03:27>> Microsoft Teams.

Nathan Latka

03:28Microsoft, interesting. Who sent you more early customers?

Tom Gibby

03:31>> Well, we've only been working on Microsoft Teams for the last six to nine months or so, so definitely Workplace.

Nathan Latka

03:38I see, okay. How many customers today use the platform?

Current Customer Count and Revenue

Tom Gibby

03:41>> Around 35.

Nathan Latka

03:4335, 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?

Tom Gibby

03:50>> No, we do much more than that. So our annual revenue is just under 2,000,000 and our MRR is $110,000. And 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

Nathan Latka

04:08Like don't like charging service revenue, it hits their valuation, VCs hate it. Why do you guys do the services revenue?

Tom Gibby

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.

Year-on-Year Growth Stats

Nathan Latka

04:58And if you're at $110,000 today in SaaS revenue, where were you about a year ago?

Tom Gibby

05:03>> Maybe around 70, maybe.

Nathan Latka

05:08Zero, something like that, okay.

Tom Gibby

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.

Capital Strategy and Near-Bootstrapped Journey

Nathan Latka

05:22Yep. Interesting. Talk to me about capital. Have you guys raised or you're bootstrapped?

Tom Gibby

05:27>> Bootstrapped.

Nathan Latka

05:27Oh, I love that. Are you thinking about raising or no?

Tom Gibby

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.

Nathan Latka

05:50Well, it's Grammy. 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.

Tom Gibby

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

Nathan Latka

06:29much service revenue did you do in 2016? Do you remember?

Tom Gibby

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.

Nathan Latka

06:40Right now we're like $500K in 2016.

Tom Gibby

06:42>> It's probably closer to $100K than $500K back then.

Nathan Latka

06:46100 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, and you're doing about $800,000 a year in professional services.

Tom Gibby

06:55>> Yeah.

Nathan Latka

06:55That's great. Interesting. Okay. So Bootstrapped, which we love, talk to me about the cap table today. How much do you still own?

Tom Gibby

07:02>> Pretty much all of it. Mean, as I said, we haven't taken any- 1%. What was that, sorry?

Nathan Latka

07:07Personally, 100%?

Tom Gibby

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.

Nathan Latka

07:23How much are the co founders on altogether, the four of you?

Tom Gibby

07:27>> 75% maybe.

Nathan Latka

07:29Okay, good. So you've given about 25% to team members?

Tom Gibby

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. Founders. How

Nathan Latka

07:50much do team members currently actually own?

Tom Gibby

07:53>> Maybe like

07:56>> 8%, 10% maybe, maybe less.

Nathan Latka

07:59Okay, 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.

Tom Gibby

08:11>> Absolutely.

Nathan Latka

08:12All right, Tom, if someone offers you guys $6,000,000 all cash upfront, do you sell?

Tom Gibby

08:16>> Absolutely not.

Nathan Latka

08:17Why not? You said that very quick.

Tom Gibby

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.

Valuation and the Friends-and-Family Round

Nathan Latka

08:44What would you value yourself out today?

Tom Gibby

08:47>> We did a very small fund a while ago, and I think that officially valued

08:53>> us at £4,000,000

Nathan Latka

08:55How much did you raise?

Tom Gibby

08:57>> About 300,000.

Nathan Latka

09:00Okay, so 300 and that was last year?

Tom Gibby

09:02>> No, that was like four, three and a half, four years ago maybe.

Nathan Latka

09:07Okay, got it. So you're not fully bootstrapped?

Tom Gibby

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.

Nathan Latka

09:26So they own a portion of the equity then too, right? So what would that fall in? You just told me 75% of Founder, like where would they fall in?

Tom Gibby

09:36>> So I think that at the moment, if I brought it to the cap table, would probably be maybe 10% ish or maybe a bit less.

Nathan Latka

09:42Got it. So employees own 10%, they own 10%, the investors, and then you guys basically own the rest.

Tom Gibby

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.

Team Size, Engineers, and Sales Reps

Nathan Latka

09:59How many on the team today?

Tom Gibby

10:02>> 16. 16.

Nathan Latka

10:03How many engineers?

Tom Gibby

10:05>> Five.

Nathan Latka

10:06Okay,

10:07and any sales reps that carry a quota?

Tom Gibby

10:10>> Yes, so we have three sales reps and How they're hiring at the

Nathan Latka

10:15do you figure that out?

10:16If I apply right now for that role, your open AE role, what quota are you gonna give me on day one?

Tom Gibby

10:21>> That would probably be a question more for my head of sales. It depends yeah, it depends on the number of things and the role we're bringing them in for really.

Churn and Net Dollar Retention

Nathan Latka

10:30Okay, that three quota carrying reps, interesting. And churn's obviously critical. What's your churn look like today?

Tom Gibby

10:36>> Our monthly churn at the moment is 2.9%.

Nathan Latka

10:40Okay, is that good or bad?

Tom Gibby

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.

Nathan Latka

10:48Do you have expansion revenue or no?

Tom Gibby

10:52>> Yes.

Nathan Latka

10:53How much?

Tom Gibby

10:54>> It's 118% is what our Where is that? Yeah.

Nathan Latka

11:00So you have about If you have that net, that means you're churning 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?

Tom Gibby

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.

Nathan Latka

11:30Interesting. What is that use? Is it number of bots, number of messages, number of API calls?

Tom Gibby

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.

Nathan Latka

11:58That'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?

Tom Gibby

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.

Nathan Latka

12:15Okay, so seats and number of bots.

Tom Gibby

12:16>> Yeah. Yeah, interesting.

Famous Five Rapid Fire

Nathan Latka

12:18Okay, very good. Let's wrap up with the famous five. Number one, favorite book.

Tom Gibby

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 Wickman. 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.

Nathan Latka

12:47Number two, is there a CEO you're following or studying right now?

Tom Gibby

12:51>> Andrew Gazdecki 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.

Nathan Latka

13:08Number three, what's your favorite online tool for building your business?

Tom Gibby

13:11>> HubSpot. And HubSpot's awesome.

Nathan Latka

13:14Number four, how many hours of sleep do get every night?

Tom Gibby

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.

Nathan Latka

13:29Okay, fair enough. And what's your situation, married, single, kids?

Tom Gibby

13:32>> Married, no kids.

Nathan Latka

13:33No kids. How old are you?

Tom Gibby

13:35>> 36.

Nathan Latka

13:3636, last question. Something you wish you knew when you were 20.

Tom Gibby

13:40>> Buy Bitcoin, Apple and Tesla stock and never sell.

Nathan Latka

13:44Guys, 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 of the

14:06business. Tom, thanks for taking us to the top.

Tom Gibby

14:08>> Thank you very much.

Nathan Latka

14:11One 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

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