How TypeStack Raised $1M at a $5M Valuation with 14 Paying Users Four Months In (Interview with CEO Silus Reddy)

Introduction and TypeStack Overview

Nathan Latka

00:00Hey, folks. My guest today is Silus Reddy. He's a founder, entrepreneur, and engineer, and he loves to make new things using mostly zeros and ones. He loves creating software that impacts some parts of life and is now working on what's called typestack.ai, a WordPress blog alternative for startups. Silus, ready to

Silus Reddy

00:16>> take us to the top? Yep. Alright.

Origin Story: WordPress Frustration and the Idea

Nathan Latka

00:19So what gave you this idea? Were you a WordPress customer and got frustrated or what?

Silus Reddy

00:24>> Yes. I I I think you're spot on. Right? I mean, before TypeStack, were actually building a different product called Window. As part of that, we were focused heavily on content marketing, specifically blogs. And we were using WordPress and super frustrated with the tool, the bulkiness of it and the issues that comes with the legacy ness of its tool. And then we felt, hey, why can't blogging be super simple? Because things are super simple right now. Every

00:59>> tool has become easy, two minute setup, most things taken care of. But we were struggling to find a great alternative which does this and then that's when we thought, hey, let's build this. And that's how TypeStack has born.

Pricing Plans and Beta Status

Nathan Latka

01:14And how much are customers paying per month today for TypeStack?

Silus Reddy

01:18>> We have only single plan as opposed to most SaaS companies. We have a single plan. It's at $19 per year. If they $19 per month, if they pay for a yearly subscription or $29 per month.

Nathan Latka

01:32Okay. And how what percent of users pay annually versus monthly?

First Paying Users

Silus Reddy

01:37>> It's mostly monthly at this point of time and we are hardly a few months old, Nathan. I mean, we we are still in beta. I mean, you see our website, it stays beta. So we are still in beta, but we do have paying users and we do have some users. But yes, it's mostly monthly at this point of time.

Nathan Latka

01:53How many paying users today?

Silus Reddy

01:56>> We we are in double digits, low double digits. We have about 14 odd paying users. That's awesome. And like I said, we're we're Congrats on your first Yes.

Nathan Latka

02:06Okay. Very good. So $29 a month times 14 customers is about $400 a month in revenue. Is right?

Silus Reddy

02:12>> Yes. Yes.

Building the Waitlist Through Network Outreach

Nathan Latka

02:13That's amazing. Okay. Tell me when when did you write the first line of code for the company?

Silus Reddy

02:18>> I think this is July, July 2022. So about four three, four months back.

Nathan Latka

02:24And then how did you build a waitlist so you could start, you know, getting your first customers?

Silus Reddy

02:29>> So we it was mostly feedback based. I mean, I've been in startups for a while now. I'm I have twelve years of experience mostly with startups. Either mine or working for someone else's. And I've ran this idea with quite a few of fellow entrepreneurs that I know and they said, hey, looks like an exciting tool and we started building even before we have a waitlist. So it was mostly a parallel process of building product and building

02:58>> a waitlist. So July we started coding the product and I think somewhere in August September timeframe we started building waitlist and you know, are where we have.

Nathan Latka

03:07Silus, how though? How? People can't just, they don't just find your website on accident. How did you get your first five people on the waitlist?

Silus Reddy

03:16>> So it's mostly through network. So we've we've believed that we want to build this product entirely through feedback. So we've sent this link to all our friends and within our network, we bombarded them on LinkedIn, WhatsApps and emails. We've sent I think close to maybe say 500 emails by the way. And then we got about twenty, twenty five odd responses back from within our first degree, second degree connections. And then that's how it started.

Nathan Latka

03:49Oh, what's going on there YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually, saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:12your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:37get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

04:58not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:24going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but

05:46if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hoveroverproducts, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview.

Silus Reddy

06:14>> Mean, do you want any people to send

Nathan Latka

06:15a LinkedIn messages or did you do it manually?

Silus Reddy

06:18>> No, it was all manual. We've got the emails. It was mostly emails by the way, not LinkedIn messages because off late I feel LinkedIn is so spammy. I don't know if people even respond there anymore. So we've collected emails from LinkedIn and then started dropping them email one by one. Was not

06:37>> even a lot the money.

Nathan Latka

06:39Subject line?

Silus Reddy

06:41>> It was like, hey, do you want to grow your content? I mean, something like that. I mean, we've tweaked it for different guys, but hey, do you like to see your grow content? Do you like to see your content grow? Do you like to see your organic traffic grow? Something like that because that's what TypeStack does. It's mostly for organic marketing and content marketing.

Team Structure and Co-Founders

Nathan Latka

07:01Mhmm. That makes a lot of sense. Okay. You're doing about $400 a month in revenue today or about $5,000 per year in terms of run rate. Did you launch this yourself? Are you sole founder?

Fundraising: $1M Pre-Seed Round

Silus Reddy

07:11>> No. We are three founders actually at this point of time. Like I said before TypeStack, were building a different product called it was called Window. And currently three of us are working on this and we have a fairly decent team as well. In fact, are funded. We've raised a small round of funding from venture capital and

Nathan Latka

07:27Hold on. Silus, guys. Hold on. Hold on. We're talking about too many things here. So Window, is that what you raised money for?

Silus Reddy

07:35>> No. We've raised money for TypeStack.

Nathan Latka

07:38Okay. So for

Silus Reddy

07:39>> TypeStack, how much have you raised?

07:42>> 1,000,000.

Nathan Latka

07:43Okay.

Silus Reddy

07:44>> We raised a million, Nathan.

Nathan Latka

07:46And okay. So you raised a million bucks in your pre seed round for TypeStack. Most companies are selling 15 to 20% of their business in their pre seed rounds. Is that about what you sold?

Silus Reddy

07:55>> Yes. That's about true. Yes.

Nathan Latka

07:56Okay. So you got something like a 4 or 5,000,000 post money valuation or a 4 or 5,000,000 cap if it's on a note?

Silus Reddy

08:03>> Correct. Yes.

Nathan Latka

08:04How did you convince investors to give you a $5,000,000 cap on a pre revenue company?

Convincing Investors at a $5M Cap

Silus Reddy

08:11>> I think it was mostly the team.

08:15>> Like I said, all three of us are second time entrepreneurs by the way. This is my second startup. Even my co founder has done a startup before, both of them. And this is our second startup and I think we are a well rounded team. Know I am a non techy, I take care of marketing and other needs. I have a techy founder who takes care of all the tech related tech and product. Right. So it's a

08:37>> well rounded team and we feel it's a fairly large market that we are going behind. I think these are few reasons why VCs were gracious enough to give us a check.

Nathan Latka

08:48Did you guys split the equity evenly?

Silus Reddy

08:52>> Yes. Almost. I think very slight differences, but yes. Almost.

Nathan Latka

08:5630%, 30%, 30%, something like that?

Silus Reddy

08:59>> Yeah. About 3% here and there. Yes.

Nathan Latka

09:01Okay. And so why why what is this Windows thing? And is it shut down now or what happened to it?

Window: The Sister Product on Autopilot

Silus Reddy

09:08>> No. Window is mostly on autopilot at this point of time. So Window was a software alternative Nathan. We were trying to build a software alternative for small businesses. It's a mobile app through which anyone can create their own online store.

09:25>> It's And currently on autopilot. It makes about $2,000 per month at this point of time with very little effort from our end. And we are currently focused fully on TypeStack. And if you see broadly, like I said, is a Shopify alternate and we are trying to build a WordPress alternate. If you see the overall philosophy of the OR, usually are trying to build legacy tool alternatives because legacy tools are very hard to use especially for SaaS

09:52>> founders or, you know, solo preneurs or small startups out there. So that's the overall philosophy that we want to catch on with our product, Nathan.

Umbrella Structure and Multi-Product Philosophy

Nathan Latka

10:02That makes sense. On your LinkedIn, it says you're working at a company called Umbrella. What's Umbrella?

Silus Reddy

10:07>> So I mean, Umbrella is both Window and TypeStack together. I mean, Umbrella is not a product itself. We just gave it a name because we have multi products and we may build more products down the line. So that's the reason we gave the name Umbrella just so that it reflects that nature of the org.

Nathan Latka

10:27That makes sense. Now when I go back to your history as a founder, you had MyWash in 2014 and you grew this. Did you bootstrap MyWash or raise capital?

Silus Reddy

10:36>> No, we did raise capital even for MyWash. MyWash was a obs heavy operations intensive business Nathan. So we needed capital. We've raised about million and 0.5 even at that point of time. And we were one of the largest or the largest laundry business in India at that point of time. We were processing close to million garments a day. And we got acquired by an Amazon funded startup called Housejoy. So Housejoy acquired us and it was funded

11:01>> by Amazon.

Nathan Latka

11:02And and how much did you guys sell for?

Silus Reddy

11:04>> I think we like two three x of our valuation. It was not a great deal because I mean if you I don't know if you guys remember, but twenty fifteen sixteen was also kind of like a very slow phase for startups with venture capital drying up and many other reasons. So we were kind of in a tight spot, but we were lucky enough that we got someone to acquire us.

Nathan Latka

11:27So you sold it for like 5 or $6,000,000, something like Yes. Yes. And this was at the same time that Housejoy raised $23,000,000 from Amazon. Right?

Silus Reddy

11:35>> Yes. Yes.

Nathan Latka

11:37And then you chose to stick around a little bit and learn. How long did you stick around?

Silus Reddy

11:43>> I was there with them for about eighteen months.

Nathan Latka

11:46Mhmm. And why join FuelFill after that? Why not go launch your own thing?

Silus Reddy

11:52>> So launching my own thing was always in the back of my head after my wash. Right? But it was that I wanted. So my philosophy is always that I need a co founder. I don't want to start alone at any point of my time. So I was constantly on the lookout for a co founder.

12:12>> And at that point of time I was juggling and start helping other startups because working for other startups is where there is the highest probability of you finding a co founder honestly because you you meet like like minded people who are also interested in startups and probably with the intent of doing their own. Honestly, that's that's one of the biggest reason why I never start alone. I always look for a co founder because starting alone

12:37>> is super, super tough in my opinion.

Nathan Latka

12:40I love it.

Silus Reddy

12:41>> More flexibility. No one have to make decisions with. You get all the glory, but you have all the responsibility.

12:50>> Yeah. I mean And usually entrepreneurs also do this, right? They have an idea, they start and then look for a co founder. I actually never believe in that theory because it's your idea and someone is sold on it. My philosophy usually is that I found a co founder first and we idea together then that idea becomes both of yours. Right? And then both of you are sold equally on that idea. Right? So I look at entrepreneurship

13:15>> slightly differently, especially doing it second time.

Nathan Latka

13:18Yeah. Yeah. No, that's fine. But I mean, have you you haven't had a big sort of cash? I mean, even the Housejoy deal, I believe Sirhan said that that was a there was no cash involved in that deal, right? It was all stock.

Silus Reddy

13:30>> There was very, very small cash involved. There is there is some cash involved. It was not a fully stock deal, but, yes, majorly a stock deal.

Nathan Latka

13:36Yeah. So you're still hungry. You haven't had a big cash exit yet. You still wanna go make a big splash. Right?

Silus Reddy

13:42>> Yes. Yes.

Nathan Latka

13:43Alright. Fair enough. Still hustling. Yes.

13:45Alright. Fair enough. On that note, Silus, let's wrap up here with the actually, let me ask you one other question. What's the total team size today at TypeStack?

Total Team Size and Engineer Breakdown

Silus Reddy

13:53>> We are about 25, but that includes a small team of Window as well. Like I said, our Window team is about three, four people who dedicatedly work on Window and most others like twenty, twenty two people work on TypeStack.

Nathan Latka

14:06How many are engineers?

Silus Reddy

14:07>> So you want to build a

14:10>> three, just three engineers, four engineers.

Nathan Latka

14:12There's only four engineers on a 25 person Yeah.

Silus Reddy

14:16>> Engineers are fairly

14:20>> expensive, Nathan, to hire and it's not easy to hire them as well. We, we But you're in you're in Bangalore.

Nathan Latka

14:29I mean, a senior a senior front end, even a senior Mongo, like, back end person, you're gonna pay $50,000 to $60,000 a year. You just raised a million bucks.

Silus Reddy

14:38>> No. We are actually in Hyderabad. We are not in Bangalore.

Nathan Latka

14:41Okay. Or or Hyderabad. Same thing though. Mean, I know they're going rates over there. It's not that expensive.

Silus Reddy

14:46>> No, no, they're fairly expensive. By the way, we don't, we don't usually have mongos. Build entirely on React JS and React JS guy here goes anywhere about 100 ks by the way in Indian currency.

Design-First Company Philosophy

Nathan Latka

14:58Oh wow.

Silus Reddy

14:58>> Fairly very expensive resource and it's hard to find a good dev. So we are fortunate that we have four great devs who are able to pull off whatever we're looking

Nathan Latka

15:08What's everyone else doing though? 25 other twenty twenty one other people. What are they doing?

Silus Reddy

15:13>> So yes, we have a fairly large design team. We are a more design focused company. Would say than a dev focused company. We we take design very seriously. We have five designers for a four dev team.

Nathan Latka

15:26Silus, what on earth do you have five we have five designers to put this page together?

Silus Reddy

15:34>> I mean, we are still working on many things, Nathan. But yes, we have five designers. Two of them

Nathan Latka

15:3925% of your think about this for everyone listening. 25% of your team are designers. That's well, that seems wild to me.

Silus Reddy

15:48>> I mean, are a design first company. At least that's what we want to build, Nathan. Maybe we are not there yet. We are happy

Nathan Latka

15:54to I mean, design first doesn't mean you hire more designers. It means you hire one really good designer.

Silus Reddy

16:02>> Perhaps, but I mean, we'll if you see we are working on multiple products, right? I mean, Window is there, then there's TypeStack. We're not working on a single product and that's the kind of org we are also looking to build. That's why we formed this umbrella, you know, honestly, we feel we are continuously exploring these multiple product approach which most companies take it as an end goal. I mean, if you see the end goal of any

16:28>> company, it's multiple products and we want to start with multiple products.

Nathan Latka

16:31Mean, it's a slightly different If Silus,

16:33there's an order of operations that's important. Okay. You know Girish very well because you sold the company to Freshdesk. Okay. You know, their money printing machine is Freshdesk. He tried very hard to launch a lot of other products. And you know what? Like, he told me when I interviewed him, less than 6% of Freshworks total user base uses more than two products. Almost all use one product. So, like, I just don't understand why would you wanna,

16:56like, just throw 20 products in the market at the start?

Silus Reddy

16:59>> No. No. We're not throwing 20 products at the start, Nathan. Even if you see we currently have two products.

Nathan Latka

17:04But Yeah. But why do want two? I mean, there should just be one. You should just be all in on one and just go for it.

Silus Reddy

17:10>> So Window is mostly on autopilot, like I said, and currently we're focused on TypeStack. Within TypeStack, are actually looking to make it more content marketing focused. So we are we are building more tools, I would say, or features within TypeStack at this point of time and want to make it like a complete content marketing tool. For example, like Contentful. I'm not sure if you know about Contentful, but Contentful is a CMS mostly focused for Enterprise SaaS

17:35>> enterprises and we want to build something like Contentful for small startups. I'm I'm not sure if I could come I mean, that across, but that's that's exactly the end goal of TypeStack, I would say.

Famous Five Rapid Fire Questions

Nathan Latka

17:48Awesome. Alright. On that note, let's wrap up here with the famous five. Number one, favorite book.

Silus Reddy

17:53>> Sorry?

Nathan Latka

17:54Favorite book.

Silus Reddy

17:55>> Favorite book. Okay. Atomic Habits.

17:58>> James Clear.

Nathan Latka

17:59Number two, is there a CEO you're following or studying?

Silus Reddy

18:05>> Honestly, no. But in India is fairly famous. I like his ideologies.

Nathan Latka

18:10Number three, what's your favorite online tool for building TypeStack?

Silus Reddy

18:14>> Sorry, your voice was weak.

Nathan Latka

18:16Tool. Online tool.

Silus Reddy

18:18>> Online tool for.

Nathan Latka

18:22You tell me just your favorite online tool.

Silus Reddy

18:27>> I would say Product Hunt. I mean, I like it a lot. Yeah.

Nathan Latka

18:30Number four. How many hours of sleep do get every night?

Silus Reddy

18:34>> About six.

Nathan Latka

18:35And situation, married, single, kids?

Silus Reddy

18:38>> Yes. Married with the kid.

Nathan Latka

18:40Okay. And how old are you?

Silus Reddy

18:42>> I am 33.

Nathan Latka

18:44Last question. Something you wish you knew when you were 20 years old.

Silus Reddy

18:53>> Mean, hard to put, but startups are great. I mean, I wish I knew that much before I jumped into startups at 25. So probably jumping at 20 was great.

Wrap-Up and Closing Remarks

Nathan Latka

19:03Guys, there you have it. He had a company. He sold to Housejoy for about $5 to $6 million, mostly stock, then joined some other startups, learned a bunch, was waiting to find a co founder, then eventually launched more recently a tool called Window now called TypeStack, which is helping to build a better, easier to use version of WordPress. They just closed a price around $1,000,000 at a 4 or 5,000,000 valuation. Team of 25, they just got their first

19:2414 customers, which we love. They're doing $500 a month or $400 a month on typestack.ai as they look to scale. Silus, thanks

Silus Reddy

19:31>> for taking us to the top. Thanks. Thanks a lot, Nathan. Thanks a lot.

Nathan Latka

19:36One 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

20:02Central. 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

20:24fundraise, 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

20:46up for that at nathanlatka.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.

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