How YetiCloud grew YetiCloud to $120K revenue and 4 customers in 2019.

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is tim marcenowski he is the ceo of yeti cloud he's a software engineer recently left capital one's tech fellow program to make it service desks non-existent via company yeticloud.com tim you ready to take us to the top yes i am nathan thanks you thank you for inviting me you bet okay so is the eddie cloud a pure play sas company and if so can i describe a customer that's paying you today yes so we we started out as a sas company but most customers that we were working with early on wanted an on-prem installation so private subscription annual subscription our customers today are typically mid-market between the 20 to 100 million revenue range uh 200 to 1 000 person company right now we've been working primarily mid-atlantic customers and now just recently broadening their scope to cover us territories okay and these customers on average what do they pay you per month or per year to use your technology so per year we have two pricing plans we have ten thousand dollars a year for our software with limited support and then we also have a fifty thousand dollar annual subscription that includes a much more enterprise friendly uh support model okay so what do you feel like an average would be something like you know twenty four thousand thirty thousand dollars a year we typically do about thirty thousand dollars a year um our average deal size today is seventy thousand that's just because we include uh typically some sort of training services that's new signups though seventy thousand correct that's our average deal size two yeah of your new signups though not of current historical paying customers so current signups yeah it's primarily ten thousand dollars sorry tim my question is when you say your average sign up your contrary today is seventy thousand dollars those are new customers you're signing up correct correct what i'm asking is if you look at your total base your total customer base today divided into whatever your total recurring revenue is today that average revenue per a customer annually is about 30 000. well right now it's 70 000. and that's because of the that's because of the services that are bundled up yeah so that's why i said sam sorry tim i want to get this right before we move on that's why i said just sas right so if i'm i'm just interested in your sas business yes so it's 30 000 so that would be the number you're looking for okay so you're saying on these annual contracts it's 30 000 pure sass you're able to charge almost double that for services and installation 40 grand oh we can charge a lot more um because we touch different technologies whether it's in their data centers or cloud providers um we could typically offer you know all-inclusive type of services down to we'll come in and do a three-day training with you and you know typically like a training per week is ten thousand dollars itself um our typical service engagement for us is anywhere between ten to thirty thousand dollars a week um depending on the scope of work but yes the software itself average deal size today between the ten and fifty thousand dollar subscriptions is thirty thousand okay when you look at your past twelve months revenue just the sas revenue what percent was that the trailing 12 months of sas revenue or of our revenue in total from software is somewhere around 80 000. um in the last 12 months with services all together it's 280k okay got it so i mean you basically have 30-ish percent of your businesses sas then and the rest about 200 grand of it is services correct and that's it's pretty common for our type of business i'm having an infrastructure enterprise software company we sit very close to the transactional system so our buyers tend to be more risk adverse so we typically have to come in on a service engagement to then upsell the product to them we always start by selling the product first but then ends up having is you know our buyer has a top of mind problem that they have to solve in the next three months and we're just we're there and we're able to answer that call and we come in we do that small service engagement for a couple of weeks and then we say hey um all the work that we've done we've replicated in our product and then here you go here's our products at 10 to 50 thousand dollars of super subscription based on the support and how many customers you have today right now we have four customers with four and pilot okay so four customers at thirty thousand dollar acvs would put you recurring at about ten thousand dollars per month is that accurate uh ten thousand dollars a year uh no because thirty thousand divided by twelve is twenty five hundred dollars a month times four is ten thousand dollars per month and sas revenue oh correct correct yes you're right and then last month of your total revenue how it sounds like you maybe had 20 30 grand and additional services revenue on top of the 10 000 recurring correct okay very cool um what i mean how are you reinvesting the services revenue to plow it back in to grow the software faster where the margins are better so right now you know our burns about 50 it's about 40 to 50 so all the money that we have left over after our burn is for potentially new hires or contractors so right now we're working with some outsourced sdr services to potentially scale out or some of our sales because we only have one um internal sdr now as an employee so say again do they have quota no okay so no they have quota in the sense that they need to make double double their pay uh within the next year so we don't have like really hard targets that we're trying to do you pay them a goal do you pay them a commission uh right now straight salary um because for a year and a half company a year and a half company we're looking for more generalists from an str perspective instead of like a hey here's a whale hunter that we recruited from you know x software company and we get this person sure how many engineers are on the team today uh there's three engineers so including myself my co-founder and cto and then we have one developer so four people full time with we have five people full-time okay we also have another marketer and sales person so three engineers one marketer one sales person okay this person joining uh next month and then you said forty thousand dollars per month uh last month in revenue thirty thousand was services ten thousand sas and you said you burned fifty percent of that so your total expenses are about sorry about 40 to 50 percent yeah okay so that's the difference between 20 000 and 15 000 right of of burn per month but that's gross burn not net so the rest of the money right that flows into the bank 15 to 20 20 to 25 000 a month what do you do with that um if we don't if we're not doing a co uh a co-branded marketing campaign with amazon like i said it goes back into hiring either contractors new employees okay so you reinvest in growth right i mean it's just it's tricky right because if you reinvest in growth and add fixed costs like headcount but then the services revenue goes down in a month right because it's not really that predictable uh you then have to fire people that's that's very true i mean for us since we have a pretty like with most contracts that we sign even though we're doing small service engagements they're reoccurring so we'll have an open contract for later engagements and we make it easier to have either an ica or a master vendor agreement where we can have that open contract and come in and do services throughout the year so i'm not really too worried about having to fire people because we missed you know quarterly services targets um we're sitting pretty good right now with the amount of revenue that we have in from our product and services to support uh six full-time people um and with the new projections with their type our pipeline we have ten new opportunities that we're pretty confident we'll close on um we're looking at about uh 700k total from that uh pipeline and that's over the next year are you are you bootstrapped tomorrow we raised capital correct yeah we bootstrapped with 90k okay so you put in 90 000 of your own money correct and when was that when was year one when was the first line of code written so we incorporated last march so march of 2018 is when we incorporated um and since then you know we've got up to 200k of revenues um and as far as that burn we've uh we've only burned halfway through that bootstrap capital um and that's a mix between you know forming a corporation initial marketing budget and then part of my salary so tim when was when was the first dollar revenue um our first dollar we didn't take on until this march um last year our approach was let's do 1099 with some prospects that we think will be early adopters of our of our product so our first year we kept you know our you know 100 burn 20k um no money coming in the door and in 2019 you know since the first year nobody's going to really look at our first year or books or at least nobody's going to take...