How Syllaby Inc. Reached $1.5M Revenue and 3,400 Customers in 2026 (Interview with CEO and Co-Founder Austin Armstrong)

Guest Introduction and Background

Nathan Latka

0:01Hey folks, my guest today is Austin Armstrong. He's a lifelong digital marketer of over twenty years, a two X seven figure entrepreneur and author of Virality, along with co-founder of AI Marketing World. He's a CEO and co-founder of Syllabi and earlier co-founder of the agency Socialty Pro. Austin, you ready to take us to the top?

Austin Armstrong, CEO and Co-Founder

0:18Yes, sir, let's do it.

What Syllaby Does

Nathan Latka

0:20All right. So let's talk about the main business first. What is syllabi is syllabi what are you guys selling?

Austin Armstrong, CEO and Co-Founder

0:26Yeah, so Syllabi is ⁓ AI video automation tool that takes you from idea to scheduled and published video on social media. I came from a video marketing background in ⁓ the agency space, where I did that for about 12 years and I got burned out transparently, but I loved what I was doing and I loved helping people. And I got to a point where I figured that we could automate. The vast majority of what we were doing for a hundred times cheaper than what my agency was charging and a lot faster as well. So we show you the topics that your customers are searching for, we generate the videos for you, you can edit videos that you shoot yourself and add in B-roll, and then we're directly integrated in every social media platform. So you can create, schedule, and publish.

Nathan Latka

1:18Very interesting. Are you an engineer by trade?

Austin Armstrong, CEO and Co-Founder

1:21No, I'm a marketer. I just got really good at marketing software and ⁓ I I have a really good business partner as as my CTO.

Nathan Latka

1:31Okay, I was gonna ask you, are obviously you are you tool calling which model to use based off the text prompt from your customer? In other words, do you put that credit through OpenAI, anthropic, you know, or somebody else?

Austin Armstrong, CEO and Co-Founder

1:44Yeah, for the script generation specifically or topic generation, we swap between different models so that we're always online. So sometimes it's chat GPT, sometimes it's it's Claude, etc. And then for the actual video generation ⁓ model, you can choose in there. So we have every model in there, C Dance 2, Cling, VO 3.1, Happy Horse, you you name it. every time there's a new model, ⁓ we integrate it in there to always stay on top.

Nathan Latka

2:13And it looks like based off your pricing page, you're a you're a credit model. So, you know, I always like to get an understanding of who your customer is in terms of how much consumption they're doing, right? What they pay you per month. Can you tell that story? What's the average customer paying?

Austin Armstrong, CEO and Co-Founder

2:27Yeah, the the current is it's about fifty-three dollars. So it's in between the basic and and mid-tier plan. So transparently with you, we launched this as a tool for service-based business owners to help them create videos to generate leads for their business. But as you know, in software, sometimes you have to pivot and your original assumptions aren't what the market is actually looking for. So the vast majority of users that have actually signed up for Syllabi are aspiring content creators that want to dabble with AI tools and start making money online, whether it's through ad revenue on YouTube or TikTok or do affiliate marketing or sell digital services, anything in that space. So we actually do have quite a few. I think about 60% of our users are just on the basic tier plan. And depending on the model that they choose, they're creating up to about thirty videos per month right now.

Nathan Latka

3:34Okay, so is that's what I wanted to help my audience understand. So if someone's doing 30 videos per month, and that's the equivalent to something between 500 and 1500 credits consumed per month. I see. Okay, interest. Interesting. And why did you guys make the decision to keep the best models on the premium plans? Why wouldn't you want to put the premium models on the basic to drive more consumption, to drive the upsell based off consumption of credits versus unlocking additional models?

3:44Yeah. Yes, yeah. Yeah, it's a it's a great question. So cost is is the the basic answer. So on the basic plan, you start with five hundred credits per month and you can still use a lot of great models on there. Like we have C Dance 2, Fast, which you can use on there. But the our cost ⁓ of the actual generation is quite high. So we also didn't want to have a bad user experience where you you create a a one minute long video using C Dance too and blow your entire ⁓ credits. That's also not a a great experience as as well.

Austin Armstrong, CEO and Co-Founder

4:39Yeah, that makes a ton of sense. Everyone right now is playing around with these models, right? If you're doing something on top of AI and adding value, is what's the margin look like, right? Do you take your pure cost for a credit and then market up 1.5x to your customers? Do you 2x it? How do you think about this? I mean, you're a marketer, you must spend a bunch of time thinking about this.

Pricing Strategy and Model Tiers

Austin Armstrong, CEO and Co-Founder

4:57Yeah, the so we have about a 40% ⁓ margin ⁓ collectively on on a user. Now there's different margin percentages on on different things. Obviously, text generation for script generation is is is quite high ⁓ percentage because it's you know costs nothing to generate text. We have an idea discovery engine in there. So we pull keywords and search volume from a third party API. That's one ⁓ cost, hard cost to us. And then the video API generation models have individual costs as well. So it's kind of a blended about 40% ⁓ margin on the the monthly subscription ⁓ cost. I have much smarter people on on my team than I do to to handle a lot of the math on that stuff. ⁓ I've never wanted to be a solopreneur, to be honest. I know what my area of expertise is. I'm a very extroverted person. I love going to conferences. I love speaking. I love creating content. And that's where I try to spend the most of my time.

6:01Pivot to that here in a second, but just to wrap this part of the interview up in a nice sentence, if someone is paying $100 a month to syllabi, what you're saying is of that $100, $60, $60 is going to be paid out to VEO3 FAST, Seed Dance, Sora 2. So you know, these the foundation models, $40 or $40 of what you have left to then pay your paid marketing spend, your salaries, your lease for your office, your podcast setup, everything else.

6:28Yes, assuming max consumption. And that's another nuance that's really important because a lot of our users simply do not use their max credits every single month as well. So it ends up being a a bit more ⁓ of a profit margin for us.

6:47Do you roll the unused credits or no? They expire at the end of each month.

6:51That's something that we're doing. So that's been transparently one of our biggest pain points. I'll I'll tell you why we decided to not roll over. And it's because I'm a content creator and I wanted to try and force everybody to use the tool to max consumption every single month, use it or lose it, to force that habit of content creation and and just consistently showing up. Now that some people get it. Others don't like it because they're they're paying for those credits, right? So we're actually in the process of of adjusting that. ⁓ that's what, you know, good startups do is they they do their best to listen and and get out of their own way. So we will be rolling over credits very soon. It's in development right now, actually.

7:38What's the current ⁓ utility or usage rate? So if someone pays for 100% of their credits each month, are they only using 80% on average?

7:47It's like fifty to sixty percent.

Product Hunt as a Growth Channel

Nathan Latka

7:49I see. Okay, that makes sense. Interesting. Let's pivot over to marketing. you're big you've used product hunt a lot, but it's gotten less upvotes over the years. Does product hunt still work or is it getting worse?

8:01Think it's getting worse, is the transparent answer. It's great for bragging rights. You know, we've got number one product of the day. I think we were product number three product of the week. We were nominated for the the Golden Kitty product of the year last year. It it depends on the product for sure and your pricing model on there. We we always try to launch with ⁓ a significant discount coupon. We'll get even product like when we were number one product of the day, I think we ended up getting about a hundred paid users. So, you know, you've gotta weigh the the pros and cons. It's a fantastic way to validate ideas and and products as well. So if you have a a completely free tool, you can get hundreds to thousand plus emails if the tool, you know, ranks in that top ten before you gotta ⁓ expand and and and and scroll down even more. ⁓ but it's okay. It's more for bragging rates, I think.

9:04⁓ your content strategy we can measure by logging in and looking you guys up, obviously on ⁓ reps. It looks like you're ranking for a good number of organic keywords and you do have meaningful organic traffic a month. ⁓ reps is not always extremely accurate, but is this SEO an intentional strategy for you guys?

Austin Armstrong, CEO and Co-Founder

9:19Yeah, absolutely. So I I in my agency, I I come from a SEO background. I've done SEO for well like 15 years, very, very long time. So SEO was always ⁓ at the forefront of the strategy and and still very much is. but aside from that, I mean, organic social media, ⁓ our affiliate program is our number one source of customers, actually. ⁓ and then paid advertising of course as well.

Affiliate Program Deep Dive

Nathan Latka

9:46Okay, let's do affiliates and if that's your number one source, help me quantify that and what should some what what can someone learn from you if they're launching their own affiliate program?

Austin Armstrong, CEO and Co-Founder

9:53Yeah. So we have gosh, I I believe about fourteen thousand affiliates. Now, of course, not all of them are active. Yeah, yeah. So yeah, yeah. So not not all of them are active, of course. It's it's very easy. And we actually just got in a little bit of trouble for because we had auto approval turned on. So Nathan, I've got about five million followers on social media in the AI space. And when I say, you know, go sign up for this affiliate program, here's how to use it and make money, I get a lot of people deciding.

9:59What? Fourteen that's insane.

10:23It's a sign up. And ⁓ yeah, we have a we have a really fun kind of ⁓ flywheel that helps our affiliates, particularly on Facebook. I'm happy to get in in the weeds and and and detail that. But yeah, our our affiliate program ⁓ has driven a little over a third of our entire revenue.

Nathan Latka

10:44Wow, how many affiliates in the last thirty days made at least a dollar of commissions from you?

10:49gosh. ⁓ several several thousand. ⁓ maybe maybe th maybe three thousand.

Facebook Community Flywheel

Nathan Latka

10:59Okay, that's that's actually I mean, so that I would consider that an active affiliate if they made at least a dollar of commission in the past thirty days. So three thousand out of fourteen thousand, you're actually doing a pretty good job of activating these affiliates. A lot of people struggle with that. They get signups but they can't help the affiliate make their first sale. What are you doing to help them succeed?

Austin Armstrong, CEO and Co-Founder

11:04Yeah. Giving them the right resources. So outside of Sylvain, by the way, I that's my primary way that I make money, ⁓ personally. I'm I've been an affiliate marketer in the SaaS space for many, many years. Giving them resources. So we give them videos that they can use. We give them email swipe copy, banner images, ⁓ we hold ⁓ webinars and ⁓ and do ⁓ live streams. the flywheel that has worked really well. So we have a very active Facebook community. It's about 73,000 people. Facebook's also my number one ⁓ audience. So I have about 2.1 million followers on Facebook. Facebook has this sneaky little feature called auto invite to groups. And so when someone engages with my content organically on Facebook. They get an automatic invite to join our Syllabi Content Creators Facebook group. Now we have nurtured that Facebook group with daily challenges and celebrating wins, how you're using the software and how you're making money as an affiliate with that software. So as these new people get the auto invite to join the Facebook group, we encourage our affiliates with this little game that says beat me to the answer. So new people. come into the group, they see ⁓ they ask questions, what is this all about? How do I get started? what is syllabi, all of these things. Our affiliates are able to respond to those questions in a meaningful way and leave their affiliate link if they'd like to.

Nathan Latka

12:55This is the group, right? What tool are you using to auto-add people to your group when they engage in one of your Facebook posts, like a like, a comment, et cetera?

Austin Armstrong, CEO and Co-Founder

12:57Yeah. Yep. It's ⁓ it it's Facebook native. So it's in ⁓ in settings and no third party tool. Facebook will automatically ⁓ send invites to a group of your choice.

13:16Can you teach us how to turn that on if we have our own Facebook page? Like what would I click? I'd click on the ab about and then what? Do you remember?

Nathan Latka

13:21Yeah. So in it's kind of buried a little bit. Let me do this in real time. So I am on a a Facebook profile with professional mode. And let me see. So it's in dashboard.

Austin Armstrong, CEO and Co-Founder

13:30Okay. I'm gonna go over I'm gonna go over to my page too to see if I can follow with you.

Nathan Latka

13:38Yeah, so dashboard and then I think Audience. Yeah, no, it's no t no totally. It's ⁓ it's kind of a hidden feature. So let me see. All tools.

Austin Armstrong, CEO and Co-Founder

13:41putting you on the s putting you on the spot here. So thanks for playing along. Is it somewhere in here? Pa settings and bro.

13:55wait a minute. Okay. So Mm.

13:59How about we'll get it after the episode and we'll put a link in the description if people want to do it.

14:02Yeah. Yeah, no problem. I'll I'll send you an email. Absolutely. Yeah, it's somewhere in dashboard settings. Yeah.

14:06Okay, cool. All right. But this is okay this is your biggest this is your biggest channel though in terms of social community is in your Facebook group, you you fill it by auto adding them, and then you said the the other unlock there is you empower all your affiliates to answer your new customer or new free user questions and you don't mind them making money off that. Yeah.

14:24Absolutely. Yeah. I just want to help encourage people. And it helps reduce churn, right? If they if they use our tool, because like that's the thing, because we have a lot of aspiring content creators using Syllabi, the problem that we've faced historically is that it takes a lot of time and consistency to become monetized on YouTube or on social media. It's not an overnight thing. But if I can help you make money faster with affiliate marketing. Now you're using the tool that's paying for itself and and you're profiting. It's much easier to make money with affiliate marketing than getting the ad revenue and it pays a lot more as well. So I'm just trying to help people, you know, use our use our tool, create great content and make some money along the way.

Revenue History and Strategic Pivot

Nathan Latka

15:13Can you teach us more about your revenue growth? I found the fund the funding you did on a week fund. I'd love to understand why you raised eighty eighty three grand from 101 investors in 2024, but then also I'd love to dial in here on the revenue growth. it looks like you put it whoop, you put a screenshot in here. When was your first dollar revenue? This was January what year?

Austin Armstrong, CEO and Co-Founder

15:23Is that? 2023. So we we officially launched, I believe it was January twenty-fifth of twenty twenty-three, ⁓ was day one. Now it's been an up and down journey when when we launched, and that and that is SAS, right? That that's entrepreneurship. So when we launched, we were a rocket ship. So we got to a million ARR in six and a half months. And then the Market exploded. And then we we tanked quite a lot. So we went from 88K MRR to about 35K MR. ⁓ and it was like 10 months downward slope. And we're like, what's happening? What you know, point everyone's pointing fingers, everybody's mad, everybody's angry at each other, it's nobody's fault, it's our fault, you know, whatever. ⁓ and we just talked to users, talk to users, talk to users. And we made a strategic pivot. So, like I mentioned, we actually launched four service-based businesses. AI Avatars was our primary video generation model, and our price point started at $49 per month. Through extensive customer research and hundreds of user interviews, we found that service-based businesses simply weren't using us. Content creators were.

16:47Mm-hmm.

16:59And they weren't interested in AI avatars. They were interested in faceless videos. And a new aspiring content creator, forty nine dollars is quite an expensive expense for them because they don't have business budgets. They can't write that off as a tax write-off. So what we did is we cut the price in half. ⁓ we cut it to $25. We've now raised it to $29, but we cut it at the time to $25. And we switched our main video offering from AI avatars to faceless video. And this saved the company. So we went from 35 K MRR to as high as ⁓ we were about 170 K MRR. ⁓ and this was just a couple months ago.

17:46This would have been in twenty twenty twenty twenty five time frame or no?

17:50Yeah, yeah, w 2025. And then we kind of plateaued around there. And right now, just transparently again, we're we're down. So we're about 130 K MRR right now. So we've had some we've had some dips. ⁓ and we're we're just folk we're talking to our users. We're we're in the process of fixing a lot of things, you know, ⁓ having that credit roll over, because that was a big customer pain point. ⁓ trying new things. We just launched our our mobile app, which took two years of development to get that's a that's a whole pain in the butt, man. But that's now live and the API MCP is is coming soon. So we're we're trying a whole bunch of stuff and continuing to talk to users every single day. And ⁓ so we're we're we're down right now, but we're kind of flat around 120 K or so MRR. ⁓ but yeah, it's that's that's the journey.

18:43And does does that can I divide a hundred and twenty K of MRR today by your fifty three dollar per month average price point? That would mean you have about twenty four hundred paying customers today.

18:51We have ⁓ no, it's more than that. We have about thirty four hundred.

18:57Okay, thirty four hundred. Maybe you have grandfather people on cheaper plans or something like that, but thirty four hundred paid customers today. Interesting. And are is the company have you raised capital outside of this WeFunder campaign?

19:01Yeah. Yep. Yep. Yeah, we we raised a precede route so we've raised about four hundred ⁓ thousand ⁓ total. ⁓ largely bootstrapped, I like to say. So we r we raised a very small ⁓ twenty five K VC check and the rest has been Angel Investors and then the We Funder campaign.

Nathan Latka

19:25It's interesting to compare where you're at today. We're recording this in in June of twenty twenty six versus these financials you posted at a glance, ⁓ December twenty twenty three. So that year you did six hundred seventy grand of revenue, you burned three hundred and eighty K. Will you lose money this year as well or will you be profitable?

Austin Armstrong, CEO and Co-Founder

19:42It goes on a month to month basis. We probably will we're we're about break even right now. So if break even is the is the is the goal, ⁓ entirely. ⁓ so we lost a little bit. Yeah, we we did one point seven last year, ⁓ in in revenue. So it was a it was a pretty good year last year, and I think we we basically broke even. I think we lost like

Nathan Latka

19:50Okay. Yep. Yep. Yep.

Austin Armstrong, CEO and Co-Founder

20:11fifty K, a hundred K, something something in that range.

20:15Yep, interesting. And what's the of the hundred and thirty K, 120K a month you're doing today in revenue, how much immediately do you then have to pay out to affiliates?

20:23⁓ we about a third.

Nathan Latka

20:28Yeah, okay, got it. So your gross margin just from even affiliates taking that out is about seventy percent. And then you have hosting costs, paying for the credit. How much do you pay? Well, you already told us. You said you'd you pay sixty percent of the hundred dollar month fee to the to the to the foundation models. So that eats. Am I doing the math right, Austin? Between affiliate payouts and foundation model credit costs, your cost of goods sold, I mean, that takes out eighty percent of your margin right there, right?

20:40Mm-hmm. Yeah, it's it's tough. Having a good affiliate program is, you know, there there's pros and cons to that, right? There's there's some pla some will do 12 month period or or even less, you know, f like high commissions for a set period of time. This might be something that we look at in the future to save on those margins. Currently it's just thirty percent recurring commission for life.

Austin Armstrong, CEO and Co-Founder

20:54Yeah.

21:21And that's a very yeah, it's it's it's a lot, but it's also attractive, right? So it gets a lot of that's the the the pro and con. That's the game that we play, right? So it helps us grow quite a lot, but it reduces our margins quite a lot as well.

21:38Interesting. And I'm seeing in the We Funer campaign, just to understand your co founder picture, I'm seeing are you Paul Armstrong, same person?

21:43Mm. Yeah, yeah. My legal my legal first name's Paul, but I go by Austin.

21:47I see, I see. So you guys basically split it thirty thirty thirty ish when when you got annoying. Yeah, yeah, yeah. Okay.

21:51More or more or less. More or less. It was it was my idea, so I had to get a little bit more. ⁓

21:57I get that. That makes sense. And here's the funding history, which is which is helpful, which is great. What so I imagine someone listening to this is going, Man, he's got a good business, right? Two million of ARR, but you know, one point eight million of that immediately goes out to paying the foundation models and affiliates. Is this the best use of Austin's marketing genius? Is this the best use of his time?

22:14Great question. I do a lot of things, man. I've got as you were reading in that bio, I I ⁓ I do a lot of affiliate marketing myself. I don't pay myself out of out of syllabi. ⁓ everything's rein invested back into the business, a hundred percent. You know, we'll we'll hopefully exit it at some point. ⁓ it's been a a fun learning journey. I love being a startup founder. ⁓ I have an a startup incubator now, which has been really fun. So I'm I'm helping and and investing in other local startups. Yeah, bullhouse. There it

Nathan Latka

22:48We'll get to that in second, but you mentioned selling at some point. If a listener offer emailed you and offered you a million all cash up front today to sell the business, would you take it?

22:49Yeah. No, too low.

Austin Armstrong, CEO and Co-Founder

22:59Interesting. Why is it too low if you only have ten percent gross margin?

23:01because a a strategic buyer will leverage the users and the marketing that we have and the affiliates that we have. yeah.

Nathan Latka

23:12So you'd sell the Facebook, you'd sell you, your community, your network, your followers, you'd work for the company for two, three years. You're selling the network as well?

Austin Armstrong, CEO and Co-Founder

23:20I would be open to so the Syllabi marketing assets, the Facebook group, all of our social media followings for Syllabi, one hundred percent. My social media following, probably not. However, I'd be totally open to an Aquahire position for a year or two and and help them grow and market them. I've got about five million followers, so that's in the AI SaaS space. So

Nathan Latka

23:38Really It's a big deal. Yeah. ⁓ you let's wrap up here. We've got about 30 seconds. You're doing you're doing big virtual summits. You're r it looks like following the Russell Brunson playbook here. What's the most people you've ever had live at one of your digital summits?

AI Marketing World Conference

Austin Armstrong, CEO and Co-Founder

23:52⁓ so we I I have a actual in person conference. So last AI marketing world. Yeah. So last year we had about four hundred and fifty. This year we'll have seven hundred and fifty to a thousand. Funny you bring up Russell. we're actually partnered with him this year ⁓ at my conference. So he'll be he'll be there.

23:56it's in person. What does that mean? I've seen him partner with people on books and things like that. Is it just a Rev share model or does he ask for equity? I mean, how do structure those?

Nathan Latka

24:14He's our keynote speaker and we're doing a conju a combined ⁓ pitch at the end and it's a a rev share on that. plus he gets affiliate commissions on ⁓ ticket sales that that he gets through a a click funnels push.

24:28I see. I see. Well he's he's great. I mean he he he knows he knows how to drive traffic and eyeballs, that's for sure. So good luck on this event.

Austin Armstrong, CEO and Co-Founder

24:34He sure does. Thank you so much. I appreciate it.

Nathan Latka

24:37All right, Austin, as we wrap up here, if people want to follow you online, where is the best place to find you?

24:42Austin Armstrong dot AI is my website. If you look me up by name, I am the nerdy AI with glasses, Austin Armstrong. I am not the defensive coordinator coach on the Florida Gators, Austin Armstrong, nor am I the six foot tall, curly haired relationship vlogger, Austin Armstrong. I'm that business guy right in the middle.

25:00Guys, Austin's AI video tool called Syllabi launched in 2023 and rocketed to a million of ARR in six months, but then churn bumped in as the space got extra competitive. They decreased down to 35k of MRR in 2024 and then started to turn things around with some of his affiliate playbooks, et cetera, up to about 170K of MRR, back down now today in 2026. At 130K of MRR, the biggest expense though is of that 130k of monthly recurring revenue, 30% ⁓ immediately gets paid out to about 3,000 affiliates. He's got an army working for him. They're just expensive. And then another 60% of the 130K of MRR goes out to pay the foundation models that power his video creation technology at Sill Buy. So the question is again, can he drive enough volume and traffic to really make good, decent money on this in addition to all of the other things he's focused on, whether that's his conference, his agency, or his seat investing. Austin, thank you for taking us to the top.

Austin Armstrong, CEO and Co-Founder

25:53I appreciate you, Nathan. Thanks for having me on.