How SubMagic Reached $8M Revenue Bootstrapped in 2 Years (Interview with Co-Founder David Zitoun)

Opening Numbers: $8M ARR and Key Metrics

David Zitoun, Co-Founder & CEO

00:00Today we are at 8,000,000 Naira. Company is two years old. We have five to 10,000 sign ups a day.

Nathan Latka

00:07>> Do you have an idea of how many new paid customers you got last month? I think it

David Zitoun, Co-Founder & CEO

00:11was around 2,500 customers last month. We have more than 10,000 affiliates today. We have a very generous program. We give 30% revenue on the lifetime value of the customers. Our churn is around 15% today, so it's very high month over month.

Nathan Latka

00:27>> Do you have a sense of of of you said it's not big. I mean, are we talking like under 20 k a month in paid ads?

David Zitoun, Co-Founder & CEO

00:33Maybe probably more. I would say between 20 and 50 k a month.

Guest Introduction and Company Overview

Nathan Latka

00:36>> Hey, folks. My guest today is David Zetun. He is building submagic.co. It is a tool that enables you to create viral shorts very quickly from short form or long form video. They're launching new products like their AI caption tool today. We're excited to have them on the show.

David Zitoun, Co-Founder & CEO

00:52David Ray takes the top. Thank you very much for receiving me, Nathan. Pleasure to be here.

Top Line Revenue and Team Size

Nathan Latka

00:57>> You bet. Us Americans, all we care about is money. You're pure still coming up in France. So I don't wanna bury the lead here. Before we jump into your product and what you do, can you share what top line revenue is today?

David Zitoun, Co-Founder & CEO

01:10Yeah, today we are at 8,000,000. The company is two years old. We're still very young.

01:19Most of our business is coming from The US, so from Yokon to Nathan, and we are proud of that as we are French originally with my co founder. Yeah, small team, 13 people in the company today. And yeah.

Nathan Latka

01:33>> That's incredible. We're recording this on June 5 so everyone has context. So David, this is obviously a very hot space and AI and video, you know, video is obviously tricky to deal with because the files are so huge and there's so much context you have to have and then you have to sort of make the shorts, the captions, etcetera. So I'm really interested to learn and sort of get more into the technology. Before we do that,

01:53>> though, let's take people through sort of the product experience here. Right. So I went ahead and recorded this just ahead of time just so you could talk through it as we go through it here. So obviously we're on the website, right? It's Viral Shorts. We're going go in here and I'm going click try for free, create free Shorts. One thing you do differently than others, you don't ask a bunch of qualifying questions in your onboarding. You're

02:12>> going to see here, you take me directly into like the email and I'm in the interface. Why'd you make that decision?

02:18Okay. So one of the reasons why we did that is that we wanted to build like a three clicks products and we wanted to do everything in three clicks to make the experience super easy. So this was most the focus of my co founder that is a technical guy. He spent like eight years before building some magic, building a website builder. And he learned about the importance of simplicity and how you can make everything in three

02:41clicks.

02:43>> And editing videos Are you saying in three clicks?

02:47In three clicks. Yes, three clicks. Yeah. It's very, I would say, trendy to say that, but the reality is editing videos is complex. And I've been using I've been editing videos since I'm 12 years old. I'm 28 today. So I've tried all the tools Sony Vegas, Premiere Pro, all the complex tools. And I know how to edit and it still remains complex for me. So trying to get this three click experience as much as possible on

David Zitoun, Co-Founder & CEO

03:17a short form content product was, I would say the most important things for us as a product. So we try to avoid all the distraction around the product and be really focused on what matters for the users.

03:31>> Yep. This was my first moment where I was like, dang it. If I wasn't about to interview this guy, I might drop off here because I uploaded a video that was a twenty minute interview. I'm like, oh, it's too long. I don't want to go do the work to edit it down short. But then I saw this extra feature you you guys launched recently looks like over here where it said wait, get clips from a long

03:48>> video. I then tested that. Help me understand that. Was that just a demand you got from the user base, longer videos?

Magic Clips Feature and Long-Form Video

David Zitoun, Co-Founder & CEO

03:55Yeah. So we started with the captions on some magic. The tool was super focused on the one thing that we wanted to do it better than everybody else. And it was how we can add amazing captions on your short form content to make your content go viral. And so we started with this. We had to be focused on that and then later on we had a lot of people asking us like hey guys, it would be

04:19amazing if we could put our long form content into Submagic and you find automatically the best viral moments. So, because we know already how to make a content that goes viral with the editing, we added these tools called Magic Clips that you're trying to use. And so, yeah, it's amazing. It's great.

Pricing Strategy and Paywall Placement

Nathan Latka

04:40>> In this new age of AI, obviously pricing and paywalls and usage based pricing versus seat based pricing is a very hot topic. So I always like the moment when the user first hits that paywall experience. You guys chose to put it right here. Help me understand why this was the right moment to introduce the paywall.

David Zitoun, Co-Founder & CEO

04:58That's a good question. I don't know when you tried that but it's been I think very recently, potentially. I

05:05>> did it like literally fifty minutes ago.

05:08Yeah, so we are always testing new things and we love testing things. We don't know anything, we're just trying things and see what works. So before that, before like a week ago, Magic Clips was free for everyone. They could try at least one Magic Clips.

05:25And so the result we had is that we had a lot of users trying Magic Clips with a conversion rate that is pretty much okay but we wanted to see is it really useful to give free clips to these users? And let's try to just put the paywall and see what is the results. So we are still in the experimentation but I will let you know later what's going on with this. We might go back to

05:47what we did before, but it's just test. And I think it's important as a company. And this is one of the reasons why Submagic, we grew that fast is that we've been able to test a lot

Nathan Latka

05:56>> of things very fast and to iterate Are you using any tool to Sorry to cut you off, David, there, are you using any tool to run these paywall tests like Superwall or are these all custom coded by our engineering team?

06:09No. We don't use any tool at the moment. And I'm not the tech guy, but I know that we I'm pretty sure we don't use any tool.

06:18>> Yep. Yep. Okay. So anyway, so I hit this paywall and then I go, okay. Well, let me let me see what the monthly price is, let me toggle off the billing, and then I said, okay, wait, let me exit out of this and explore the interface a little bit more before I convert to paid. So clicked around a little bit, wanted to understand more about the product, let me fast forward here, wanted to see more about

06:37>> the full pricing strategy. I think at this moment, David, it would be a good one to actually dive into your guys'pricing page and sort of how you guys, from a business perspective, decided to set up some of this stuff. So let me actually just share your live website here. Right? So this is how you guys have structured. And I think to your point, you're saying this little toggle here is a new thing. You just started

David Zitoun, Co-Founder & CEO

06:59>> adding this as an add on, the Magic Clips?

07:01Correct. We we started Magic Clips five months ago as an add on. It was a bet because we could have, like, put Magic Clips just available for, like, the pro plan or the business plan including to the plan. But we wanted to try it as a add on because we it gives so much value for the users and it's so much a product that is not directly linked for what the users

07:25used to pay before having Magic Leaps. So we try these add on things.

07:31>> You have a really interesting pricing page because you have, like most AI tools basically have this section, right? Which is the usage based upselling based off some output. You do number of videos and then the max length of the videos is the bet you're making on the usage metric. And then but very few of these new AI tools are are still charging on the seat base. The logic is they want as many team members using it

07:54>> to drive these values as fast as possible. Why did you decide to restrict the team why did you decide to basically restrict both to put paywalls up for both?

Nathan Latka

08:04So for the the numbers of videos you can do per month, this is the only metrics we can like. This is the number one reason why people are upgrading. They need more videos. So if we don't restrict on that, it's a way for us to improve the expansion, I would say. Second thing is that we try to divide the different plan based on the different type of users that we have, the different type of ICP. We

David Zitoun, Co-Founder & CEO

08:31have kind of like two type of ICP. We have the people who are using Semmagic for themselves, for their own videos, small business owners starting short form contents, don't know anything about it and want to discover it. And then we have the agencies. We have so much marketing agencies, video short form content agencies. And those users have different needs. So

08:55we really wanted to try to see if you are this kind of SAP, you should take this plan. This is for you. And so that's why as a small business owner, you don't need to have five members in your team. It's not useful. None of them are inviting people.

09:11>> There's lot of folks that always try to reverse engineer virality. Right? They put that watermark in the free plan and then they count how many new users they get from those free plan click throughs every month. Was that an effective strategy or is that an effective strategy for you guys?

Nathan Latka

09:25Yeah. There is a freemium at Submagic. You can use Submagic for free for three credits on the top, like the try out three videos without credit card and with the watermark. Yes, it's great, but it's very difficult to quantify the impact on the and to see really how much people are posting videos with a watermark online and how many views this video are making. But it's a way for the users to try the product without paying

09:51and I think we love that. It's important for the users to try.

David Zitoun, Co-Founder & CEO

09:53>> Oh yeah, it's a good point. Most people, when run this virality playbook, there's like a powered by button under the thing, but to your point, you're a video, so you have no way to track if the watermark inside one of your customer's videos gets clicked and drives you a new customer. You're just betting the extra brand exposures is a good thing for you. Exactly. Yeah, very interesting. Okay, let's go back to the early days. So you

Nathan Latka

10:15>> just celebrated your two year birthday, I think. Take us back to sort of launch date. I always like to go in here and look at what Perplexity tells me here. But is this accurate? Perplexity is saying 2023 is when the first user was acquired. You start off with a team size of nine?

10:34I like this table. It's great. We started with two, just Tifei, my co founder and I.

10:42The first customer we had was in May 2023. Yep. Okay. So pretty

10:48>> much it. Great. And then you went from zero to a million fairly rapidly. When did you hit a million in revenue? So you can see perplexity gets this stuff wrong. Right? That data is obviously wrong. Yeah. When did you hit a million of ARR?

David Zitoun, Co-Founder & CEO

10:58So we hit a million in ARR three months exactly after we get our first customers. So we had our first customer the 05/01/2023. We reached million ARR the August 1. Exactly.

11:11>> Wow. Okay. August 2023 million. And what drove most of the growth from zero to 83? If had to pick only two growth channels, what were the two most impactful?

11:23I would say short form content. I will explain just after, but I would say short form content and timing. Timing because there is a time market fit that I really believe in business in general. We were at the right time, with the right product, with the arrival of ChatGPT at this time. Everybody wants to make short form. Alex Amozi was literally booming online. Everybody wants to start understanding, hey, we should do short form content and we

Nathan Latka

11:54should make caption as well because everybody, all those influencers are making caption. We should do the same. And then short form because at the beginning of SEMAGIC we had like a lot of like viral short form content coming not from us but from users saying like, hey, I discovered this new tool called Submagic. They can allow you to make like three clicks captions super easily on the product. And they showed a product like this and so

David Zitoun, Co-Founder & CEO

12:22many videos went viral. And this two mix was just an explosion, I would say.

12:28>> Yep. Yep. It's interesting. I wasn't expecting you to give those two answers. What I thought you were going to say was your affiliate program and product hunt. So I wanna dig deeper here, right? So you saw that natural organic posting happening, but you then launched your affiliate program, I think, fairly early on. When did you launch that? And would you consider that a key to going from zero to a million quickly?

12:51We launched the affiliation program pretty much like I think it was thirty days after we had our first customers because at the beginning of some magic, we had €0 to invest into marketing. And I was used to do affiliate marketing in my first company where I was myself an affiliate for other businesses. So affiliation is amazing when you don't have a lot of revenue. It's super It's a good way to attract people and pay them only

13:20if they make sales. So we had no choice to do affiliation. So I started this affiliate campaign and I was just telling people if you make a viral short form content talking about some magic and it goes viral, you're gonna make a lot of revenue because myself, I did it once and the short form went I think it did like 100,000 views and it drives like $3,000 MRR directly. And I say to my users this is

13:44the proof that it's working. You should do kind of content like this. I really literally teach them how to make viral short form content talking about some magic. And they just like keep posting content over content over content every day because they were making revenue. The success of a good affiliation program is your affiliates needs to make revenue and needs to make money out of it. So, yes,

Nathan Latka

14:06>> affiliation Can is you share that number? How many total affiliates today have made money from you?

David Zitoun, Co-Founder & CEO

14:12Wow. Crazy, man. I don't know exactly the numbers. We have more than 10,000 affiliates today. We have a very generous program. We give 30% revenue on the lifetime value of the customers. So if you, Nathan, you become an affiliate tomorrow and you just bring your customers to some magic, every month that they will pay some magic, you will get your commissions. And it's pretty generous.

Nathan Latka

14:33>> Yeah. Which is rare. Most people most people do not do that for life. They do it for the first year, then it goes to zero. So I would agree. I mean, it's a very generous program. I mean, can you quantify that? I mean, if you have a large chunk of your 8,000,000 revenue coming in, it's from affiliates. You will have a large chunk of your COGS be affiliate payouts. Do you know how much you paid out

14:50>> to affiliates last month?

David Zitoun, Co-Founder & CEO

14:52Yeah. Yeah. We know exactly. So affiliation today represents 20% of our revenue. Like, 20% of our global revenue is coming from affiliation.

15:03>> And So 20% of the 8,000,000 of your ARR today. So so Yes. I mean, that's a big chunk. That's 2,000,000. I mean, that's 1.7, 1,800,000. Yeah.

15:12>> Wow. Okay. So so if that's the case, if 1,800,000 of ARR is coming has has is active today on Submagic and has come from affiliates. Divide that by twelve, that's about $150,000 of monthly revenue, and you're paying out 30, you said 30%, right, to most affiliates?

15:31Correct.

15:32>> Yeah. Yeah, so what, that's like four Okay, so you're spending out $45,000 a month in affiliate payouts, something like that.

15:37Yeah, but one thing I can tell you for affiliation, people might see that, oh, it's crazy. You give 30% commission, it's huge. Like we had a lot of people saying like, baby, you're crazy to do that. First, we didn't have the choice at the beginning. Like the company was like we had zero customers and we need to be generous. And secondly, like people see like, oh, you're gonna give 30%? It's huge and stuff like that. But

Nathan Latka

15:59they say like, you don't see how much business affiliation is bringing to your business, like, without tracking the link. There are so many videos. Like, when you make a YouTube video talking about some magic, maybe, like, a small percentage is gonna click on the link. But a lot of them are gonna see the brand some magic again and again and again. And this is for free. And this is amazing. And you cannot quantify how much is

David Zitoun, Co-Founder & CEO

16:24it. So it's great.

16:26>> So David, just to sum that up, what you're saying is you can directly attribute about $150,000 or about $2,000,000 of ARR to affiliate traffic, but you're also betting a lot of your other $8,000,000 of revenue or other $6,000,000 of revenue may have been influenced by some affiliate branding, even if they didn't click through that link directly.

16:44For sure. Made it make sense for you, Nathan?

16:47>> A 100%, a 100%. No, agree with you. I'm playing dumb a little bit here because we wanna learn, we wanna capture all the good stuff.

16:53Take Yeah. Us back to that

Nathan Latka

16:55>> The other one, other thing I wanna touch on, and again, the reason I'm hitting on all these, I like to sort of create frameworks for my audience. And one of the frameworks I like to have them think about is there's really only about 34 ways to grow your software company, right? There's cheap stuff, there's expensive stuff, there's fast stuff, and there's stuff that takes more time. You over here used influencer marketing, you used affiliates. You know,

17:16>> we have Product Hunt here. You used Product Hunt early on. You did three launches. Ironically, you have one in 2023, which was, what, this was four months after you launched. Take us through this launch.

17:27Two months after we launched. Two months. May 1. July 3, someone told us like, guys, you should do a product. Because at this time, we had zero customers on The US. And my co founder and I decided to say, like, we should change the strategy. We are going full into The US. Forget about the French country. Let's go full in. And so he say, like, there is one thing we can try is product hunt. Apparently, it's

17:49something good for software. So we try that. And from this day, it was the best decision ever because, like, our main market became The US from this day.

17:58>> Yep. You're a big is is Alex Ramosie an affiliate of you guys?

David Zitoun, Co-Founder & CEO

18:04No. We would love to, but he's not an affiliate of SoMagic. He loved the product. I met Alex Ramosy a year ago. And no, he's not an affiliate. We would love to, but he's not.

18:15>> That's great. Okay. Any tactics you would give other founders who are trying to figure out how to hit the number one or number two spot on product hunt like you did?

18:23Oh, it's really hard. I wouldn't recommend everybody to do product hunt again, to be honest, because I think it changed a lot since we launched two years ago. Yep.

Nathan Latka

18:35>> Be honest, really I get that same sort of upvoting in the past two years. It's gotten harder.

18:40It's super hard. It's the energy you have to put to to become, like, number two, it's, like, twenty four hours reaching out everyone to say, like, please, I've got for my product, checking my product. So it's a lot of efforts. I think when you just start it and you don't have a lot of choice, it's something good to do. But after like, we don't care if we are like 18 a day or tens when we launch

David Zitoun, Co-Founder & CEO

19:00again on product and it's just I don't see if

19:05>> Yeah. Okay. Well, cool. Well, let's fast forward. So May 2023, you launched your first million of revenue in August 2023, a couple months later. And then about a year ago, I'm recording this of June 2025, so call it June 2024, you talk about hitting your one millionth user. Walk us through this milestone. What drove most of this growth?

SEO Strategy and Free Tools Experiment

Nathan Latka

19:25Yeah, man. It was an incredible milestone. For me, 1,000,000 users is much more incredible than 1,000,000 ARR because it's a 1,000,000 period. And I always imagine myself like a stadium, 80,000 people multiple by twelve, thirteen. Like, I'm like wow. It's huge. And they tried my product at least once. I think it's a mix of the time to market that I told you. The good marketing that we did since the beginning of pushed super hard on the

19:52brands and on the marketing through affiliation, SEO, paid ads, influence marketing and there is this kind of word-of-mouth that has been driven a lot of growth for Submagic. We are super focused on the customer experience And as a Bootstrap company, like the best marketing we can you can have is like word-of-mouth. It's free. And so we really get inspired by Brian Chesky from Airbnb about this 10 star customer experience, how you can give like an amazing

David Zitoun, Co-Founder & CEO

20:21experience to your users. And so we try to do like super incredible things with our users, creating WhatsApp group with them, building the product directly hand to hand with them. I take approximately five to six calls with users every day since the beginning of Some Magic. Everyone That's can book a call with the CEO of Some Magic every time they want. Because I want to be super close to the users and every time they like this

20:48experience, they want to talk about SomeMagic around themselves. There is no software that can offer that on the market at the moment. And that makes me proud. So it's a mix, I would say.

20:58>> Yep. You'd mentioned SEO paid ads and community. The first thing that I hit once I launched a paid plan was a pop up where you said, hey, join our Discord community. And so you have Discord here. You just mentioned WhatsApp as well. You got 7,600 members here. Besides the strategy for other founders listening saying, hey, make sure you invite people into the community, any tactics for how to manage this effectively?

21:22Managing the community is very hard. I would say we are not the best today on Discord. On WhatsApp, we try to do something very very it was especially on the beginning. What I would suggest to any founders is like the first 100 customers of SoMagic, I took on Stripe the information. I reached out to them. I say send me a text message, please. I will give you, like, a discount for the next month, but please send

Nathan Latka

21:47me a text message. I need to get your number. And those people, I put them into a WhatsApp group. And I built the product with those 100 people. I was super close to those people. Say like YC say like find 100 people that love your product. And I would try to do the kind of the same thing and this is free and you will understand that those people will become your best product manager ever because they

David Zitoun, Co-Founder & CEO

22:08will tell you what features they want and how we should do it. It's so super people try to find solution to coaches, to online, to whatever. The solution of your business is in the answer of your customers. Talk to them. Be close to your customers. They have the answer.

22:27>> It's a cheat

22:28code. Yeah it's a cheat code but be careful. Not all your customers will be good customers. You have to determine if this guy feedback is a good customer. If he's really the guy that we're trying to hit with our marketing or not. And does this feature is a really must have feature or it's just a nice to have. And just you have to be very careful about listening your users and then taking good decision. But yeah,

22:55this is a cheat code for me.

22:57>> I wanna get into your team here in a second, which you put up a great post on about three weeks ago, but I have to touch on the two other growth channels you said you're using aggressively, which is SEO and paid ads. When I look at your SEO traffic, I mean, really fast growth from 2023 to 2025 in terms of domain rating, you saw a huge pop in organic traffic. I'm curious if this was intentional up

Nathan Latka

23:18>> to 9,000,000 and then dropped back down to about two thirty five. Walk us through what's intentional around your SEO strategy. Yeah. So I'm not the best in SEO to be honest. I don't know so much about it. But

David Zitoun, Co-Founder & CEO

23:33what I can tell you is the pics that you saw, it's a test that we have been trying. It's like we launched a free tool strategy at some point, at some magic. So we created free tools like how to compress your video, how to download video from YouTube and stuff like that. And those tools were performing so well. In one month, it explodes. The one that really Can

23:55>> quantify explodes that in any way? Number of website clicks, number of customers, any kind of quantification there?

24:01The conversion rate was really bad, to be honest. Yeah. And we learned from it. We had, like, nine like, at some point, 1,000,000 visitors a month. Like, it was crazy. Like, even more. I don't remember exactly, but you saw the peak. It was huge. But the reality is that those things don't convert and don't attract really good customers. And after a month or two we had

Nathan Latka

24:25Google that blocks that because they don't want people download YouTube videos for like trying to download YouTube videos so they block this page. That's why the traffic went down. But it was a good learning. We're still gonna make some efforts to improve this free tool strategy but it's not what drives us the most revenue in terms of SEO today.

24:49>> Yeah. It's a really good strategy. We put that up here in terms of free tools because we've seen other companies just crush it with this. But to your point, if Google stops your ability to just sort of process YouTube videos because of your niche, it makes this particular tactic hard, but it's super cool to see that spike when it was working going up to like 9,000,000 views per month. I mean, this is just insane organic traffic.

David Zitoun, Co-Founder & CEO

25:11One thing I would say is like free tools can be awesome for your company, but you need to really be careful about what kind of free tool should we do. And you need to make sense regarding the value proposition of your product. So for us, downloading your YouTube videos is too far from why people should use And otherwise, doing something like compressing your videos or finding titles is much more linked to why people should buy Submagic.

Nathan Latka

25:38You need to just put your place at the place of your clients and it needs to make sense. So I think it can be awesome. I see so many great strategies about free tools. We still need to learn a lot from that.

David Zitoun, Co-Founder & CEO

25:48>> I love that. David, I wanna be respectful of your time and we're at the limit we set. Do you have ten more minutes to keep going?

25:53Yeah. Sure. We can do that for you.

25:55>> Okay. Great. So that was free tools. Before we jump into your team, can you touch on paid ads for a second? Are you spending a meaningful amount per month on paid ads?

Team Structure, Recruiting, and Remote Culture

Nathan Latka

26:05I know that we're spending on Facebook ads and Google ads. We're gonna start LinkedIn ads soon to try. I cannot tell you exactly how much we spend on this, but it's not like huge. Regarding our old marketing, not representing something huge. We try to avoid paid marketing as much as possible. Right?

26:24>> Yeah. Yeah. I mean, as a bootstrap you're and you're basic I mean, you're very you've raised it. It sounds like a small how much have you raised total? It's a very small amount. Right? We we never raised. Oh, you didn't do, like, a, like, community round of, like, half $1,000,000? No. Ah, okay. Okay. I misunderstood that. So you guys are bootstrapped to $8,000,000 of revenue?

David Zitoun, Co-Founder & CEO

26:41Yeah.

26:42>> Yeah, love that. So you obviously paid ads, those are the most expensive advertising you can do. Do you have a sense, I'm on your guys'Facebook page right now, Do you have a sense of you said it's not big. I mean, are we talking like under 20 k a month in paid ads?

27:00Probably more. I would say between 20 and 50 k a month. Maybe around 50 k, I would say.

Nathan Latka

27:06>> Okay. It's scaling. How have

27:07you set that up?

27:08>> Did you hire internally, someone on your team to do that? Did you use an agency? How are you doing this?

David Zitoun, Co-Founder & CEO

27:12Yeah. We have someone fully dedicated to ads at the moment on Facebook ads in our team. His name is Antoine. He's an absolute legend. He's just trying things all day long and we have also agencies that help us crafting some good product like content ads. It's not easy. But we try stuff and we have also an agency that we work with for Google Ads that is not part of the team, but it's an agency.

27:41>> Do you want to recommend them? Should we give them some love?

27:44Yes. It's a French agency. If you want, I can give you the full name and you can put it in the description. Called it's called Kiebers. Kai Kai, I e b e r s. It's a French agency. You can Kiebers agency.

28:02>> This one?

AI Usage Internally and Bootstrapping Philosophy

Nathan Latka

28:05No. Sorry. We moved the e at the kai kai I b e b e. Yes. Exactly. KeyBirds.

David Zitoun, Co-Founder & CEO

28:14>> Premium DDC Growth and Creative Agency. Exactly. Very cool. Are they also so a French group that you guys found?

28:20Yeah. It's a French it's a French agency.

28:23>> This one?

28:24Yeah. Exactly.

28:25>> Great. That's awesome. Very cool.

28:27Yeah. Really good. We'll give

Nathan Latka

28:28>> them some love. Let's you told me it was really important. You gotta give some love to your team. I mean, you guys are 8,000,000 of ARR. You are 13 people. I mean, so you're cranking $700,000 of revenue per employee, which is really impressive efficiency. While I play this awesome reel that you made on your team, walk us through your org chart today. What's it look like?

David Zitoun, Co-Founder & CEO

28:45So the team is divided in three. We have the product team with the tech guy. We have the marketing team and we have the customer experience team. These are for us the three most important things in a software company.

29:00So we have very atypical people in the team. Everyone is atypical. The average age is 28. I'm 28. 70% of the team doesn't have any degrees. We all are driven by the same stuff that is like we want to deliver value and learn from our experience. So we love learnings and yeah it's amazing. We are all remote. We met once a year in a seminar. It was this year in Thailand two months ago. It was amazing.

29:33So this video is part of the trip. Last year we went Tuscany in Italy and yeah, it's great. We work with just the top of their field. They are really top notch on what they are doing. They are super open to discuss. So if anyone wants to learn from experience they love, exchanging their learnings. So sometimes Antoine from the growth will contact other growth managers to discuss about what they learned the last two months and try

30:01to find Elie is a legend. He's our CMO. How do you

30:06>> find these folks, David? How do you recruit?

Nathan Latka

30:08So the funny part is I would say 80% of the team, so eight people out of 13, would say kind of like this, are coming from Submagic. They are users of Submagic first. They've been using Submagic for content they wanted to create and we just send emails to our database. We are hiring and part of the team is coming from Submagic and this is awesome because it makes a sensation about they know the product. They use

30:35the product so they know what they're gonna work on.

30:39>> Interesting. That makes a lot of sense. Would you recommend Aura for organic SEO? It looks like Irina is saying she formally worked with you guys.

30:50I'm not managing this here directly. Ellie will probably If Ellie reposted this, that makes sense. So yes, potentially, yes, we recommend Irina. I remember even myself. I don't work with the SEO directly, but Yeah. Everyone is very

31:05>> that free tool. Yeah. He's saying that free tool strategy you guys do really worked. I mean, 4,000,000 organic monthly traffic valued at $800,000. I mean, good traffic.

David Zitoun, Co-Founder & CEO

31:14Yeah. Yeah. It brings good traffic. It's good for the brand as well. Yes. It was a positive thing for sure, but I will not tell you it's the most important thing on the SEO, but it was great for sure.

31:25>> Yeah, this is great. Well, we've hit a lot of the big stuff I wanna chat about. I really wanna, I mean, getting the product for a second. I run obviously media business, we're recording a podcast, right? So how are you deciding what are these key moments? Are you looking for syntax changes in the voice or the tonality or is it the transcription? Yeah.

Nathan Latka

31:43There are like hundreds of parameters that we configure with the AI about like what makes a video captivating, what makes a video viral. So about what you say, are you talking about something sensitive or not? Are you talking about money? What are, like, the conflicts in the voice? What are the humorous moments? And so we build the clips like this. And we are we are, like, super proud of what kind of clips we can generate with

David Zitoun, Co-Founder & CEO

32:08AI today. It's amazing.

32:10>> One of the challenges I'm facing with all these AI tools I'm testing is I want to be able to take my memory and store it in SubMagic. In other words, I wanna be to hover over this moment here and have you guys tell me the logic you use to pick this thing. You might say, This sounded like something related to money, so we flagged it. And I wanna then add the memory and say, Good job. My

Nathan Latka

32:30>> audience loves money clips. Do more of this. Do you have that ability yet to take your user's memory into your UI?

32:37Not yet, but this is something we had the feedback on. Exactly the same thing as you say. I want to train my own Submagic AI about what I like and about what my users like. So you will be able to as you can see next to the clip, if you click next to you have a plus button like thumb ups or thumb down on the right. Yep. Yes. If you select this clip, we'll know what clips

32:59did you like, what clips you didn't like. And then we can go after when you click on edit here, you can then edit your clip. Then add your captions, change your style, add your music, do everything you need. Add your b balls on the top when it's ready.

David Zitoun, Co-Founder & CEO

33:15And, yeah, it's very simple to use. But, yeah, this is something that's gonna come up on some magic super soon.

33:24>> Yeah. Very cool. Anything else you wanna showcase on the product?

33:29If you want, I can share my screen maybe with a project.

33:31>> Yeah. Do it. That's always good. Yeah.

33:34You should see your project. That's why. Let's take this clip of

Nathan Latka

33:43So when you're in some magic,

33:46it's very simple. We want to get access, like the users get access to everything he needs in just three clicks. So you can choose your style in just one. The best style on the market are here and then you can edit your caption like this. You can add the emojis you want

34:02super easily, change the position of the caption if you need. Add your music. We had we put all the best trendy music on the market and also the premium music that we have in partnership with Storyblocks. And finally, what you need to make a great short form content, you need a hook title. So if you need a hook title, you're just gonna go on edit caption, generate your hook title, and this is gonna make your shot

David Zitoun, Co-Founder & CEO

34:26form much more engaging at the beginning. So this is a kind of a summary of what you're gonna see in the video. So for example, I'm gonna put this one, put it a little bit bigger, and then when the video is gonna start, you're gonna have this kind of like Oh, cool. And then you can add the

34:41>> people David, how do you know, okay, imagine this gets done. We're recording on Riverside. I wanna take this and publish it. I wanna create a sixty second short to teach other founders how to build an affiliate program using what you just taught us. I need, there's three screens. There's my face, there's your face, and then there's the screen share asset. Have you built technology into Submagic where it will know when to cut to my face asking

Nathan Latka

35:05>> the question, your face answering, and that third track, the screenshot?

35:09Yeah. So let's say this is a long form to short. So this is a long clip that we take short form out of it. So if you click on the clip, you can now change the camera and decide it like for example, I'm just gonna you can change and say, like, it's gonna be, like, two faces. And you can then change to, like if it's two faces, decide it in the video which faces you want to

David Zitoun, Co-Founder & CEO

35:34put.

35:35>> And then How do we get that third track? This is what I haven't seen any video editor do yet is the faces a lot of like, people do well, but what no one's doing well yet is that third option, that screen share shot.

35:45Yeah. We don't offer the screen share shot yet, but this is something that's gonna come on some magic so far because it's so useful and I know exactly the use case and this is on the roadmap already. It's gonna be like

Nathan Latka

35:59>> is super cool, man. I'm so thrilled for mean, it's so rare you find a company not only crushing it, but also bootstrapping it with a small team. You're hyper efficient. Anything else that you wanna touch on before we wrap up here?

David Zitoun, Co-Founder & CEO

36:12I think we talk about everything that I wanted to share with the team, with the audience that you have. I think I would just say something regarding bootstrapping a company today. It's even more true regarding AI. We are able to be bootstrapped because AI is helping us a lot.

36:32Without AI, we should have been maybe 40 in the company or 50 people to do what we do. So I will say use AI as much as possible. We try to push all the teams to use AI for everything they do. For marketing, for customer support, for products. It's so useful. It's crazy. Like Cloud four point zero, I don't know if you saw the last one, is just insane.

36:52>> Well, are you using? Are you building agents in N8N or Gumloop? Can you maybe share what are your backend tools you use for Me, this personally, I Chargepti. I use Chargepti for everything.

37:05I talk a lot to Chargepti myself, like with voice notes. I explain a lot of the context of what I do. So it helps me much better with the context. My co founder in technical part, I couldn't speak for him, but I know that they use Cursor, they use Cloud four point zero, they use some stuff I like don't want to go too much into details because I might say some stupid things, but I know that

Nathan Latka

37:25they use AI a lot. Just by using GBT, you can scale so much. It's so useful.

David Zitoun, Co-Founder & CEO

37:32>> Mhmm. No. It's amazing. And I guess before I let you go, let's just round out sort of again, we're recording this in June. Let's just round out sort of everything where you're at. So we know you're at 13 people today. You've grown bootstrapped about $8,000,000 of revenue. 20% of that has come from affiliates. How many new signups, just free and paid, did you get last month? Or a range?

37:52I think we have around 8,000 or 10,000 new signups every day. So potentially, like, I don't want to say mistake, but I think around like, between five to 10,000 signups a day. That's wild. So two a month 200, 250,000

38:09>> in a month on average. Yeah. Do you have a target, David, on how many of those you consider a good conversion rate to paid in their first session?

38:20Like that, no. I don't don't I don't really I I don't want to say like, bullshit numbers, but

Nathan Latka

38:28>> no. Do you have an idea of how many new paid customers you got last month?

David Zitoun, Co-Founder & CEO

38:33Yeah. We had around like, I think it was around 2,500 customers last month.

38:41So you can have the conversion rate. It's very low.

38:46>> Well, yeah, but if you're not spending a ton on top of funnel, you don't need to have a high conversion rate to make a lot of I mean, to do well and to grow. So it makes a ton of sense. And so 2,500 new customers and a lot of these AI tools are having churn issues. You're seeing 5%, 6%, 7% gross logo churn on a monthly basis. How are you guys thinking about churn? Are you comfortable

39:04>> sharing your churn? Yeah,

39:06sure. Churn is high for AI tool in general, would say. We have a high churn.

39:12Our churn is around 15% today. So it's very high month over month.

39:15>> That's logo churn per month? What do mean by logo? So there's two types of churn. There's revenue that's churning and then there's number of logos churning and the reason that there's a difference is because some customers pay way less than other customers.

39:32So the way we calculate the churn is when I say it's 15%, it's like if we have 100 customers at the beginning of the month, at the end of the month 15% of them will leave some magic. Yep. I don't know if it's That's

39:45>> what we logo churn.

39:46Okay.

39:46>> My thinking is some of those customers are probably stickier. If you take your agency cohort, they'll probably will be stickier than your small business cohort.

39:56For sure. And we already know that, that the higher plan are churning less than the lower plan. But the churn is high and I think it's not something we should Of course, it's not the metrics that we like because I don't know any SaaS company that like having a high churn. But it's part of the People want to try product. They want to try AI tool. They want to discover. They want to see if Shortform is

40:21for them. And it's fine. It's part of the usage of some magic. And the market is so huge. It's just the beginning of people knowing about they can do short form for their business. They have so much value by making short form to grow their activities, to make their work known about the world. It's amazing. We just launched a feature yesterday, enable the users to translate the captions into 50 different languages. So you can speak English

40:46and have caption in French or in Spanish or whatever. So you can reach much more audience from just one videos. And this is why people love short form and I believe it's only the beginning.

41:01>> My bet, and feel free to challenge me on this, my bet is these AI tools, the first tools that in a specific niche, so you'd be video editing, that allow me to store my memory. Me teaching and sticking the memory into Submagic is what creates the lock in, and I think churn's gonna drop the second people. Whoever launches the memory stuff first, I think wins the market.

41:21You are right. I think you are right. One thing that we plan to do is just connecting users account to their social media directly from Submagic so we can know directly which video performs well on their socials coming from Submagic. So we can learn from that. And the goal is just to make our users more successful. So what you told me just before regarding magic clips and saying, I like these clips. This is what I want

41:45to see. Oh, these clips perform well on my Instagram or I get two leads from these videos as well. We will learn from this to make a better experience for our users and just make them more successful. But I think you're right.

41:58>> Yeah. I mean, the way I do this now, I know what my audience wants. I will take this clip, this whole thing we just recorded with you and me. And I will say, Go timestamp every time David said a numerical number related to growth or finance. Add ten seconds to each side. Create a clip. I know that is the rule that will go viral every time, but I wanted to stick that in one of these video

42:17>> platforms so you can do it automatically for me in the future.

42:21Nathan, we have to talk again. I want you to be a beta user of some magic and magicist because I think you have great ideas.

42:27>> Oh, guys, David, I have totally sorry, I've abused David's time here. Said this about twenty minutes, but I just fell in love with what he's doing. I mean, an incredible story. Again, launched in, call it 2023, May 2023, first customer. Launched the affiliate program shortly after that, hit a million bucks of ARR in three months, did a product hunt launch, really leaned on virality and timing and affiliates. They have over 10,000 affiliates. They pay 30% of

42:50>> lifetime value and 20% of their current revenue here in June 2025 comes from affiliates. They're doing 8,000,000 right now in terms of ARR. They're signing up about 200, 300,000 new signups per month converting, you know, call it 2,500 to 3,000 into paying customers. And they're doing this all guys, just two years old, bootstrapped with a team of 13. David at Submagic, thanks for taking us to the

43:11top. Thank you, Nathan. Thank you so much.