How Y42 Reached $800K ARR and 50 Customers in 2021 (Interview with Founder Hung Dang)

Introduction and Y42 Origin Story

Nathan Latka

00:00Hey folks, my guest today is Hung Dang. He's the founder of y42. Started his career though in the live event business. And in 2014, he co founded Party Like Gatsby, a global event series hosting more than 100,000 guests. Driven by thin margins, he needed great data infrastructure that ultimately ended up ended up with him building a tool called Mitra Intelligence, which ended up being acquired by a German Fortune 100 company there. He realized a massive need,

00:23which has helped him build his current company y42, an easy and scalable data platform. Hung, you ready to take us to top?

Hung Dang

00:30>> Cool. Nathan, I'm such a big fan. Thanks for having me on this podcast. Very excited.

What Y42 Stands For

Nathan Latka

00:35You bet. What does y42 stand for?

Hung Dang

00:38>> You know, I'd be very pragmatic. 42 is the answer to everything in the universe. If you have read the hitchhiker's guide to the galaxy, why is, you know like, why why, like, y42? And I'm being very pragmatic here. Hey. It's a 3letter.com domain. Okay? It's that's unbeatable, so you cannot beat us in SEO. I know I lose a lot of romance when I say that to the nerds out there that follow us because of the name,

01:03>> but that's the reality.

Target Customer and Go-to-Market

Nathan Latka

01:05Oh my god. I love this. Okay. This is great. So so tell me a little bit more about who's using this tool. Is is it really the marketing team that knows does not know how to code, or is it really, like, data engineers that wanna do their work faster?

Hung Dang

01:16>> So our go to market is very simple. We acquire companies that hire their first data engineer, data analyst, the first data person, so to say. And this data person doesn't wanna stitch together five or six different tools like integration, orchestration, visualization, transformation, whatsoever. And so they wanna go with an all in one tool, and this is why we are the very natural choice for any company that starts out with a data journey. At the same time,

01:45>> so the only math that we really have to solve is, how don't we let them outgrow us?

Nathan Latka

01:50Mhmm.

Hung Dang

01:50>> That's the whole business model. Fun fact, like you said in the beginning, I actually built this tool with SMEs in mind. So I was running the entire data pipeline for this German Fortune 100 company that acquired us, and I analyzed, you know, the data, and I had to build that infrastructure for other people to consume. And so I feel in the event industry, you have a lot of data. So you have, like, huge amount of people,

02:14>> you know, who were analyzing all the events from Ed Sheeran, Justin Bieber, the biggest festival whatsoever, And there are hundreds of thousands of people producing billions of data points, but the people who were consuming this data were not the most sophisticated. And so this is why we had to build something very easy and scalable, but also in a setup of, you know, a rather big company. But somehow, you know, it works out very well for startups,

02:39>> this value proposition, and this is how we went to market. However, we see a very increasing interest from SMEs, which, yeah, would be harder for us to close as a young startup and which is why we didn't focus until this point. But I think moving forward, SME will play a very big role within our go to market as well.

Pricing and Average Annual Contract Value

Nathan Latka

03:01Let's circle back to that in a second. But first, your current customers. I mean, what are they paying you on average per month to use the technology all in one?

Hung Dang

03:08>> Yep. So 10 to 30 k is the annual contract value. So it's somewhere in the middle of the average. It would be around 20 k.

Solo Founder Journey and Personal Investment

Nathan Latka

03:19Okay. Around 20 k. That's great. And then take me back to how you got this going. Now are you a sole founder?

Hung Dang

03:24>> Yes. I'm a solo founder.

Nathan Latka

03:26So I wanna dig here a little bit because everyone always tells you like, oh, you need co founders, you need balance, but I I think you had a bit of a financial win when you sold, Amitri. Did you pour basically all of those winnings back into y42 and that's why you you own a 100% on day one?

Hung Dang

03:42>> Yes. Something along this line, but, you know, I I grew up in Vietnam actually, and I I came to Germany when I was eight. So I actually grew up, you know, not very wealthy, and so I I wanted to take a lot of the money that I made and give it to my family and my parents. That was very important to me. So and whatever was, you know, kinda left, of course, all in, I went back

04:05>> into y42. I still you know, at at my previous company, I built a data solution very niche, just for the event industry. And this time, I wanted to go all in and say, hey, I can build it globally. I can make this, you know, I can, yeah, build a company in Europe, a data stack that the world has not yet seen, and so that's why I came back into the game, and to be fair, you know,

04:28>> when, when I say it came in with little money, I could have done it for a long time by myself, and this is why I started out with, hey, I'm the solo founder. I'm gonna dictate how it goes. I don't really need VC money, and I'm gonna build it, you know, from a clean slate. It doesn't matter how long it takes me, but I'm gonna build this tool that solves the problem first principle, and I don't

04:49>> wanna stitch together six different tools to solve that, you know, problem and basically, you know, like battling complexity with complexity. So really, how do I solve it clean slate? I could have spent like two, three years building it. Right? But would have been a bad choice because we need customer feedback along the way, and this is why yeah. Sorry to I extended the question a bit to sum it up. I am the solo founder. It has

05:12>> massive advantage, but don't do that if you don't have the benefit of, you know, having some, you know, let's say success before that people are actually drawn to you and say, hey, I would join you on this mission because they've seen that I had a level of success before and doing that way, I'm capable of having roughly 10 to 20 people that have a small share in the company, but they are very strong. They are as

05:40>> strong as an old co founder that I would have. Mhmm. So I feel like at the price of one, cofounder, I have roughly 20 cofounders.

Employee Equity and Ownership Structure

Nathan Latka

05:48So that's effectively you're talking about your employee stock option pool. What did you set that up? It's like they were talking like 10%, 20%. How big did you make that?

Hung Dang

05:55>> Actually, very big. So it's like a split right now deducting all the dilution through, you know, the the seed and the series a round. I think the effective split is 60/40 right now without 60 for me, 40 for the employees without calculating the VSOP pool, which has not been distributed yet. So it would be a rather fifty fifty split.

Nathan Latka

06:21It's on a fully diluted basis. Yep. Yeah. Yeah. No. I love this. I I love the model. I love that it's a sole founder. You can make decisions. You can play a long term game because you had your own success. How old are you?

Hung Dang

06:33>> I'm 30 by now.

Nathan Latka

06:34I love this. Okay. So 30 years old, can I ask how much of your own money you put into the business?

Hung Dang

06:39>> It's gonna be in the 6 figures range. Okay. Yeah.

Nathan Latka

06:43Okay. So between a 100,000 and a million bucks, your parents and your family are happy when you sold Mitrax, you gave a bunch back to the or Mitra, it sounds like you gave a bunch back to them.

Hung Dang

06:52>> Yep. Exactly.

Nathan Latka

06:54What did your did your mom buy anything interesting when you gave her a bunch of money?

Hung Dang

06:58>> Yeah. I mean, so we are from Vietnam, like I've said. So, yeah, we we did buy a property, there in in Vietnam.

Nathan Latka

07:07I I was I was curious if you're gonna say, like, you know, she bought, you know, a chicken farm or some really random thing, but okay. Property. It's pretty normal. Yeah. Anyways, you're all in on the business. You're you're scaling. When did you when did you write the first line of code for the business?

Hung Dang

07:21>> First line of code early two thousand twenty.

Nathan Latka

07:242020. Okay. Yeah. And you wrote the initial code. Right? I mean,

Hung Dang

07:27>> you wrote the MVP? Yeah. Roughly 50% of the front end code that you would see was written by me.

Nathan Latka

07:33Yep. Okay. And now it's not the case anymore.

Hung Dang

07:36>> It's getting less and less, but, yeah, it used to be written a lot by me.

First Customer (Filoro) and Early Growth

Nathan Latka

07:40And when did you get your first customer? Do you remember who it was? Can you tell that story?

Hung Dang

07:46>> Yes. It was an SMB, actually. Funnily, I just said we don't chase after SMEs, but it was one because we came in with a strong recommendation from one of our business angels, also a very close friend of mine. As a fun fact, he's the prince of Austria, technically speaking, coming from the house of Habsburg, which you know, I I know you're in The US. You don't know that, but it's the most influential,

08:12>> yeah, aristocrat family that ever existed in Europe.

Nathan Latka

08:16Is this this La Famiglia?

Hung Dang

08:19>> No. No. It's not La Famiglia. It's yeah. It's it's it's an angel of ours. Okay. He's a very good friend of mine, and he did everything he could, you know, he was driving us around, introducing to all the SMEs, and they really need a data solution. Right? And so we we came to this company called Filoro. They're making 8 they they're making over 1,000,000,000 in revenue. You know? Like, that's how big they are. Wow. And they

08:44>> they don't have the data solution yet, they look at ours. It's like, wow. It's so easy and it's so simple. And this was in in September. To be fair, it took us six months until we onboarded them on the platform. So but they were the first, effective client. Like, it's signed ARR, not really realized, realized was roughly in in March, and so that was our very first client.

Nathan Latka

09:09Yeah. And how many now have you scaled how many today now, Hung?

TechCrunch Article as Growth Catalyst

Hung Dang

09:14>> So it we went to pilot, you know, September, and it was more like friends and family are like begging, hey, please use our platform kind of attitude for a long time. So we were, you know, we're getting one or two customers that way until February, and where we raise our seed round end of February, and then we went to TechCrunch, you know, like, Frederick from TechCrunch. He was so kind to actually, hey. This is just some

09:41>> random Berlin data startup. Like, you know, I'm just gonna write a very nice article about them. I think it was, like, the longest TechCrunch article he has written in a long time, linking my LinkedIn, the video. And so so really, the the reason why we started growing so fast was because of the one TechCrunch article of Frederick who I'm still very thankful for until this day, and this is when it marks when we really, yeah, went

10:07>> to market. And I'd be very honest to you. So I I love to, you know, review as much numbers as I can, And I want to do that, very truthfully until one point in time, which was when we raised the series A. And so that was early summer. And by that time, we had, 50 clients.

Seed and Series A Fundraising

Nathan Latka

10:27Five zero. Got it. Yep. And so you did I guess, you did a 3,000,000 or a 3,000,000 round earlier this year. Is that right?

Hung Dang

10:33>> Yep. Exactly.

Nathan Latka

10:34And then what was the more recent round?

Hung Dang

10:37>> 31,000,000.

Nathan Latka

10:3831. Okay. And, that would you consider that, I guess, your series a?

Hung Dang

10:42>> Yeah. That was our series A.

Nathan Latka

10:43Tell me about how you think I mean, you're you're obviously very dilution sensitive. You're a sole founder. Right? When you raise that kind of money, you you get diluted. Right? So how how'd you think about that round?

Hung Dang

10:52>> We diluted, you know, within the reasonable range, I would say. But I can say, yeah, we're confident that

Nathan Latka

11:02Hung, I mean, I'd say reasonable series a, average series a. You're you're selling 15% of the business. Were you sort of in that same range?

Hung Dang

11:10>> A little bit more. A little bit more.

Nathan Latka

11:11Okay. 15 to 20. Fair. Yep. Yep. Okay. And and so I guess why take the dilution? Tell me about the strategy behind the money, where you plan to spend it.

Hung Dang

11:21>> Yeah. So first of all, you know, the kind of business that we are, it's a, I'm a big fan of Zeb Evans, and I know you just talked to him recently. It's a very similar model that we're playing, like an all in one tool that, you know, just replaces them all. And this kind of tool and I I know he made it work, but we cannot make it work as easily because we need to to have

11:45>> the trust factor, like the stamp. Hey, this is something, you know, I'm I'm trusting them with my data infrastructure. This is a random 3,000,000 seat, you know, dollar seed round company. I'm not gonna trust that they will be around much longer. So it's a huge trust factor that we actually win by, you know, diluting, putting ourselves out there. To be fair, we're based in Europe, we're based in Berlin, and so you have to know that this

12:10>> round is probably one of the biggest round that Europe has ever seen for a SaaS startup in Europe, also probably, if not the biggest valuation also, and this puts us For for

Nathan Latka

12:21a for a seed round. For a series a round. Series a. Series a. Yeah.

Hung Dang

12:25>> Yeah. For a SaaS, it was a in Europe, probably one of the biggest rounds, also biggest valuation that Europe ever had. And that puts us in an extremely favorable place of being able to hire the best people, being able yeah. And,

Team Size and Hiring Plans

Nathan Latka

12:39obviously people how many people today?

Hung Dang

12:42>> We are 70 people today.

Nathan Latka

12:43Seven zero. How many engineers?

Hung Dang

12:46>> 40 engineers. 40.

Nathan Latka

12:47And you did see I mean, when that press came out, that enabled you that gave you leverage hiring top talent.

Hung Dang

12:53>> Yeah. But, it just came out, like, literally two weeks ago. So we were already at the size when that came out. And now, of course, we rather grow to, like, a 100 to a 150 people, and they're, you know, like, doubling the team makes it much easier to get the same quality that we have or even a bit higher when we double the team.

Revenue at the Series A

Nathan Latka

13:14Mhmm. Now, Hung, 50 customers at that $20,000 average ACV, that puts you right around a million dollar run rate today. Is that about accurate? When

Hung Dang

13:22>> we were raising the round, that was around, our number. Yes.

Nathan Latka

13:26Got it. And that was I guess, raised around a couple maybe a month month ago was when you were raising. So you're

Hung Dang

13:31>> A couple of month ago. So when we got into the process, it was early summer.

Nathan Latka

13:36Okay. But when you launched the process, you were already north of a million dollar run rate?

Hung Dang

13:40>> When we launched the process, we were at roughly 800 k. Okay. But there was we had a contractual upsell also within, like so we, for example, start up, we give them, hey, a discount until the end of the year. And if we were counting the contractual upsell, then it would go, you know, above the 1,000,000 range.

Nathan Latka

14:03Very, very cool. So what so, I mean, maybe you're at, like, 1.2, 1.3 today. What do you think you'll finish this year at? Can you get up to 2,000,000 run rate by the end of December, or is that too fast?

Hung Dang

14:12>> We don't think that's gonna happen, but Yeah. Still the reason why is, you know, you have to understand that this number that we accomplished, we were like a very small team. We had one salesperson. Only it's my colleague, We had one SDR and one marketeer. So that that was the total team. And this one salesperson is now, you know, also my, our VP of growth. And so he was doing that almost as an IC, and he

14:38>> would close every possible deal out there. But now he has to step back and, you know, onboard new people in the sales team. And so we lose a lot of conversion, we lose, like, yeah, just because there's an onboarding process of new AEs. So we probably gonna continue the same trajectory until the end of the year. But by next year, of course, you know, we have a much higher ambition. It's a big year.

Nathan Latka

15:06I was gonna say next year is a big big year for you. Can you go from a million dollar run rate to, you know, 5, 6, 7, 8,000,000, in twelve months?

Product Vision and Upcoming Launch

Hung Dang

15:12>> That's the plan. Yes. That's that's a plan. We hope so too, but I I think yeah. I I'm gonna release it here first. I'm actually gonna release it at data council at the end of the year, big on stage, but you've heard it here first. We are in the process of releasing a completely new software that's probably gonna will really revolutionize, I don't know, the data industry, and we're gonna launch it, reveal it at data council.

15:43>> Not gonna say exactly what it is because, you know, otherwise, I cannot reveal it at data council anymore. And I think that will put us on a trajectory of, yeah, go go to market using product led growth in Is it is it

Nathan Latka

15:57a new module, like integrate model, orchestrate, visualize, or is it a whole new product?

Hung Dang

16:01>> It's a whole new architecture and infrastructure I see. Behind. So that's what we have been working on for the past, you know, six months by now, and we're very excited for for that to launch. And I think that would change the trajectory a lot. And, of course, you know, the fundraising that we did, I mean, yeah, we we cracked that, you know, we did some ARR in a short amount of time, and it's very unlikely for

16:26>> the type of product that we have that is just so brutally big in order to still push it to the market, But I really feel the fundraising happens a lot also on this product on the product vision that is coming up next. Yep.

Revenue a Year Ago vs Today

Nathan Latka

16:40Well, I can't wait to see what you do. If you're doing about a $100,000 a month today, do you remember what you were doing exactly a year ago?

Hung Dang

16:46>> Around the same time in the year? Yeah. Sorry.

Nathan Latka

16:49Like, one year ago, what was your revenue run rate?

Hung Dang

16:54>> I cannot tell you exactly that, but I think it was around 50 k. 50 k. ARR? Like, no. Like, 50 k in total around.

Nathan Latka

17:05Oh, about it. So you're doing, like, like, $4,000 a month?

Hung Dang

17:08>> Yeah. Something like that. Yeah.

Nathan Latka

17:10Yeah. So from $4,000 a month to a $100,000 a month, that's a good growth rate.

Hung Dang

17:14>> Yeah. Yeah. That's Let me count. Sorry. So we had around three customer in November last year.

Nathan Latka

17:20Okay.

Hung Dang

17:20>> Yeah. Around that.

Nathan Latka

17:21Around that. Yeah. Good growth makes it As I say, the valuation story, people are listening and they're gonna be going, wait, he raised at basically like 120x revenue multiple, Right? But if they believe your story, if you look at your background, if you look at your growth rate, these things start to sort of make sense. Right? So that's sort of why I asked the question. But we're excited to see what you release. Is there anything else,

17:40Hung, that I missed that you definitely wanna touch on?

Hung Dang

17:46>> No, actually.

Nathan Latka

17:47Awesome. You like that? Still think you'll be you'll you'll focus on selling to, again, the growth engineer, the head of data, that same job title?

Hung Dang

17:54>> Yeah. Data analyst, the head of engineer. I think the type of product that we are is, yeah, we are an all in one tool that, you know, helps people integrate with data, visualize, orchestrate, like, do the entire data pipeline, within one tool. And we offer also no code, no code platform for people that, you know, that are not very Yeah. Good with SQL, but we also offer SQL at the same time. And we really want to

18:21>> as the philosophy is, we wanna bridge the gap between the business user and the engineers just because, yeah, I'm an engineer, you know, like, I love to write code, I love to write SQL, but at the end of the day, my counterparts, they're consuming the data. They, you know, they they make decisions based on that, and they have to be involved in that process. So we're almost solving, a philosophical problem. So it's not about, you know,

18:44>> a technical problem. It's really an organizational and business problem that we're trying to solve, with the product.

Nathan Latka

18:50Forward to seeing what you do. And, hey, I meant to ask you this too. When you raised that 3,000,000 seed earlier this year, what cap was that at? Was that, like, a 10 to 20 cap?

Hung Dang

19:01>> You mean valuation or,

Nathan Latka

19:03like Oh, was that a price round or a note?

Hung Dang

19:06>> It was a priced round, actually.

19:08>> Oh, yeah. Yeah. Yeah. Yeah.

Nathan Latka

19:09Was was the valuation around sort of maybe 20,000,000 back then?

Hung Dang

19:12>> It was a little bit less.

Famous Five Rapid Fire

Nathan Latka

19:13A little bit less. Okay. Fair. Great. Let's wrap up here with the famous five. You cannot say Hitchhiker's Guide to the Galaxy for the first one, but what is your favorite business book?

Hung Dang

19:23>> How to Win Friends and Influence People by Dale Carnegie. I know a lot of people say that, but I I think that's a very important book.

Nathan Latka

19:30That's a good one. I'm trying to remember what Zeb said. You listened to that interview? That was a really good interview I had with him. I I'm excited to get that out and publish, but he said the same thing. Number two, is there a CEO you're following or studying?

Hung Dang

19:41>> Zeb Evans.

19:43>> He's a good one.

Nathan Latka

19:44Number three, what's your favorite online tool for building the business?

Hung Dang

19:47>> I know I should say ClickUp, and but it's probably Slack.

Nathan Latka

19:51Do you use ClickUp?

Hung Dang

19:52>> Yeah. Of course, we use ClickUp.

Nathan Latka

19:54Did you switch to them, or were like, were you using someone else before?

Hung Dang

19:57>> We abandoned everything from ClickUp.

Nathan Latka

19:59That's Who did you abandon? Name some who were you using?

Hung Dang

20:03>> We were using everything before, Jira, Asana, whatever. It's just, you know, all in one. And the thing is, I follow Zeb a lot because the way he builds a product, the same technologies also. Like, his front end is, you Angular twelve, thirteen by now. And, like, everything he does is extremely similar to the way I think also. And so and I'm sure there's a lot of problems he already solved before where I can just mimic, the

20:28>> way, how he does. I I love to get to know him. So, Zeb, if you ever hear that, you know, like, I have you on my LinkedIn even, but I haven't texted you yet.

Nathan Latka

20:37So I I will introduce you. I will ping him real quick and ask if he's open to the intro. Bet he'll say yes, and I will see you up in intro. Okay?

Hung Dang

20:43>> Thank you so much, Nathan.

Nathan Latka

20:45You bet. Alright. Number four, how many hours of sleep do get every night?

Hung Dang

20:48>> I wish more than six hours, but it's only six because I'm I'm a person that produces a lot of hormones and in a good way, like, I'm very excited and just, oh, I have a million ideas again. I cannot fall asleep because of that. So it's a rather positive stress that doesn't let me fall asleep and stay asleep long enough. But it's on average six hours. I wish it would be seven or eight.

Nathan Latka

21:12And what's your situation? Married, single, kids?

Hung Dang

21:16>> Just broke up with my girlfriend of, yeah, almost three years. But I'm I'm yeah. It was I'm happy.

Nathan Latka

21:23So Now you can invest a little bit more in yourself. Be happy. You're 30 years old, single, no kids. Last question, What do you wish you knew ten years ago when you were 20?

Hung Dang

21:36>> I think if you follow the process, life will be alright.

Nathan Latka

21:40Guys, follow the process. He sold his first company, used his winnings to go all in as a sole founder owning a 100 of y42.com. Again, a new way to manage your data in an easy way. Growth engineers, you know, analysts, heads of data, are using it. They're growing about 50 customers today. They just passed a million dollar run rate earlier this year, up from $4,000 a month about a year goes to a healthy growth rate. Dollars

22:0131,000,000 series A raise sold between 15 to 20% of the business as they look to scale attracting great talent, 70 on the team today. Check them out at y42.com. Hung, thanks for taking us to the top.

Hung Dang

22:11>> Nathan, thank you so much.

Nathan Latka

22:15One 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, 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 Central.

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