How VEED Reached $1.5M ARR and 5,500 Customers in 2020 (Interview with CEO Sabba Keynejad)

Introduction and background

00:00Hello, everyone. My guest today is Sabba Keynejad. He is the co-founder and CEO of VEED, an online video editing platform. Alright, Sabba. You ready to take

00:10us to the top? Let's go. Let's do it.

00:12So how'd you get into this space? Were you, like, an ex video producer at a cable network or something? How'd you think of this problem?

00:18Not at all. My background, I went to art school. I worked in creative technology, advertising agencies, branding agencies, and just kind of found myself into video. I just liked it.

00:28Interesting. Okay. So you came on the show actually back in no. No. Sorry. You didn't come on. I found you via Indie Hackers because you had there there was some good growth. I think you'd passed what what was revenue? $100,110 grand a month?

00:43When? Now. When was it when

00:45you posted on IndieHackers? Do you remember when you posted?

Hitting $1M then $1.5M ARR

00:48We did a 1,000,000 ARR. Yeah. We're about one and a half now.

00:52When did you hit a million in ARR? Do remember?

00:55Two months ago.

00:56Oh, just okay. So you're growing pretty quickly here. Okay. So okay. So give us the backstory. What year did you launch the company in?

Founding story and going full time

01:02Launched the company technically about two years ago, but went full time on it about fourteen months ago, and that's when we started charging.

01:09Okay. And who is we?

01:12We me and my cofounder, Tim, two years ago. And then few months after that, we got a couple of developers to help us out. And then, yeah, we just went full time, quit our jobs fourteen months ago, that's, yeah, when we started charging.

The 50/50 co-founder equity debate

01:23Very cool. And, you know, obviously, the biggest question for any hacker getting started is I have a cofounder. How do we have the tough equity question? If you're lazy, you split it fifty fifty. If you do it right, someone is usually has a little more or a little less. How did you guys do it?

01:41That's not the right way to do it. If you're doing it that way, then you shouldn't be your cofounder. I mean, like Come on. Split fifty fifty. I mean, like, you're gonna be doing this for years, hopefully. You're gonna make a really big company. If you you everyone needs to be incentivized from your cofounders to your employees. So, you know, just don't be greedy of equity. Give it away and get everyone on board. Right?

01:59I think clarity is also very important, and it's clear, and it's helpful to understand who is leading the company, which is why I always advocate that someone owns more than 50%. It just makes it crystal clear how things are working.

02:11Completely disagree with that.

02:13Very good. Have you guys ever have you have

02:16you I mean, you have roles in a company. Right? So, like, someone's CEO, someone's a CTO, and I'm CEO of the company and Tim's CTO. He makes and leads conversations and decisions in technology, and I'm not gonna push back on that. And I'll take strategic decision for the company, and he probably doesn't push back on that. Like, we do push on each other, but, like, fundamentally, you know, we're I think we're aligned. And maybe that's just,

02:37you know, the synergy that we have and other cofounders would be different, but I'm a massive component for being fifty fifty.

02:43Mhmm. Interesting. Okay. So you jump into this. You quit your full time job. What was the company doing in terms of revenue when you decided to finally quit your full time gig, both of you?

Quitting their jobs at zero revenue

02:52Yeah. So zero.

02:54Interesting. So so, I mean, that must have been a scary time. You're not sure if you're gonna get revenue. You have some life savings built up. How much I mean, how many runway how much life runway did you have when you quit your job?

03:05So about four, five months.

03:07Interesting. Was that nervous? Or did it make you nervous?

03:10Yeah. Yeah. How did you do that? You know, you got I mean, like, you know, I'm single. I don't have a mortgage. I'm, like, relatively young. I can get contract work if I need to relatively quickly. So it didn't seem like a massive decision at the time. I think the thing that we're more scared about was getting to profitability super quick, so we didn't have to go back to our jobs. That's that's what we're worried about.

Reaching profitability

03:32Mhmm. Are you profitable today?

03:34Yeah. Yeah. We've always I mean, you know, once we had this really beautiful moment where our savings and our revenue crossed over at this perfect point.

03:43So yeah. No. We've yeah. We've been profitable since then, basically, and still profitable now.

03:47That's great. And when you say profitable, like, 10% to the bottom line, 50% to the bottom line each month?

03:51No. No. I mean, you know, like, three, four months ago, our runway was zero. We'd spend everything we would on, you know, growth and putting it back into the company. Now we're probably putting away about 30%.

04:02That's great. So what do you do with that? Right? Any founder, indie hacker reaches that beautiful moment where you start to have some cash flow and you go, do we just do we pay ourselves more, or do we leave it in the company and reinvest it?

04:13Yeah. So, I mean, like, I think it depends. Like, we were paying ourselves about $2,000 a month until I mean, even to the mill I think when we hit a million ARR, we paid ourselves more than $2,000 a month. And we don't even today, we don't need to pay ourselves any anymore. We're more than happy with that.

04:32But yeah. I mean, definitely reinvest in growth. Like, it's if you have a company that's growing, it's hungry, and it it needs it. Right? It needs more people in customer service. It needs more people in design. It needs more development to keep it moving forward, and, you know, you don't wanna stunt that growth, so put it straight back in.

04:44What is the team size today?

Team of 20, half engineering

04:47We're just 20 now, I think. That just yeah. Just crossed that yesterday.

04:5120 folks. Very good. And how many engineers? I

04:54think a good 50%. Yeah. 50 including, including Tim? Yeah. Yeah.

Product and use cases

05:00Interesting. Okay. So tell me more about the product. Right? So so obviously, you've got some customers on the product. How are they using it? What what do you help them do?

05:07So there's a bunch of things that we help them do. I mean, when you make a tool in general, it's it's very broad. It attracts different types of people with different use cases. But the ones that we see really that are really powerful is subtitling content. So most videos on social play without audio. So subtitling is a really great way to, you know, help people consume that content, but then also for accessibility reasons. So we have

05:29a lot of governments and educational institutions as well using it for that reason. We have a lot of podcasters kind of turning their audio into, you know, the waveform videos. I think I've seen you do some of those. No. Have I? No. Maybe not. Maybe someone else. We've tested it. You know the ones I mean. Yeah. What did you find?

05:46I mean, what the the issue for me is it's a it's it's it's less about does the tool do what it says it does. It's more about we do one episode a day. So, like, it's that's too if they call them audiograms. Right? If I did an audiogram every day, there's just I would overwhelm my Twitter feed with audiograms. So it's just more about we strategically do one here or there, and my internal team typically takes

06:08care of it. But but I know this is a very hot space. I mean, we just had I forget the founder's name, but I think the company called Wave just came on, and they're doing about the same amount. And they only really do sort of podcast audiograms.

06:20Amazing. Right? Yeah. No. Exactly. And so yeah. I mean, you know, in terms of use cases, that's that's another one. But also just, you know, a lot of people make the Gary Vee style videos for LinkedIn. A lot of people trim content into different snippets, get it out in different channels. You know, there's a bunch of different things. And as the tool is getting more complex, you can do, you know, more and more things of it,

06:38and that opens up the use cases in the market size as well. Mhmm.

06:41Yeah. I mean, one of the things that's interesting I mean, my first company, Hayo, was a full drag and drop Facebook application builder. And I remember with our dev team and our sprints, I guess, we'd say what we need is if they can drag and drop to create anything. We finally spent, like, months building a free form drag and drop thing, which when I go to your homepage and I look at sort of how you have

06:59drag and drop here, it's sort of the same. But what we found is when we gave you all that freedom, they created really shitty designs. So we're like, well, crap. Maybe after we we have to take away some of the freedom to make sure it's high quality. How do you balance that?

07:13Right. It's an interesting question. I think, you know, the same on Canva. You look at Canva templates, and you're like, these look amazing. And then someone goes in the light, oh, yeah. But I want Comic Sans because it looks really friendly. And this stock video from Shutterstock, it's beautiful. Right? So, I mean, you've gotta give them enough freedom for them to make a mistake. Right? But you just kinda wanna push them in the right direction. So,

07:32you know, we don't know, we you know, we actually give our users as much freedom as they like, and we it's it's an interesting question. I think, you know, I think the most important thing is at least as long as the user feels really, really comfortable using the products and making those changes, it's great. If they feel scared using the products and they're gonna mess something up, then they're not gonna be very confident and creative. So,

07:52you know, let them go.

5,500 customers and pricing

07:53How many customers do you have today?

07:565,000 just under 5,500.

07:595,500. Interesting. So what does that mean? How much are they paying per month on average?

08:04Average. So we've got a $30, and we've got $15. And I think the average is $22.22 50 when you add it all up and yeah.

08:15Yep. That sounds about right. And and so let me I mean, you do a very unique thing on your homepage, which you just you you there's not really, like, enter your email, sign up for a trial. It's just upload a video and start using the thing. I'm curious what this looks like. So so how many people sort of hit your website each month, and how many new like, how many people click upload video and actually upload

Traffic: 10,000 visitors, 6,000 renders

08:34a video each month?

08:36Yeah. Don't know. No idea. I mean, I know how many people you know, we've got about 10,000 people hit the site every day.

08:43How many how many upload?

08:46Upload. Let's say, like, 6,000 maybe.

08:51Okay. That that's actually so six 60% upload some sort of video file.

08:55Yeah. No. We're pretty good on that, to be honest. I mean, know, there's a there's a bunch of people who did, like, 20 videos a day. Had this guy doing, like, a 100 videos a day, and it's crazy. But, like, you know, there's skewed in that. But, you know, a lot of people that upload and try out, and, you know, you can also enter URLs from YouTube and stuff like this. So

09:10Mhmm. So I love that you put the utility value of the product right at the front, but at some point, you have to pick the perfect moment to show that paywall or that trial wall where you have to get the email and get an account set up. What's the activation metric you wanna see a user hit before you show them the actual sign up or paywall?

09:28Yeah. Interesting. I mean, we give away as much value as possible upfront, and we can do that. You know, when they download the video and there's a watermark, they've got a decision. Right? If they're a company, business, or an influencer, you know, it's in their best interest to remove it because it's their content. But a free user who just maybe wants to put something on Reddit doesn't mind the watermark, but that's great marketing for us. So,

09:48yeah, we just put all the value up And if they wanna get rid of the watermark and become a subscriber, they can for, you know, 15 or $30 a month.

09:55And how many new customers did you add over the past thirty days?

09:59Firstly, I don't know that. We did we did 80 yesterday, which is good. Anywhere between anywhere between, like, 60 to 80 today, something like that.

10:08So is it fair to say if we just look at a flash point, the average day at VEED looks like 10,000 unique website hits, 6,000 uploads, of which 80 convert into a new customer?

10:19Yeah. Sounds about right.

10:21Something like that. Very interesting.

10:23I'd say I I would say no. I would say renders. I would say, you know, I I don't know about unique uploads, but unique renders a day would do about 6,000.

10:31What's the difference between an upload and a render?

10:33Well, an upload is probably yeah. That's a good question, actually. Yeah. I mean, you know, we so in general, we're not, like, super hot on funnels conversions and stuff like this. Like, we spend most of our time talking to our users, understanding what their needs are and what their jobs to be done is. Right? And we just yeah. And the reason why we're not, like, going deep on these funnels is because we're just not at that

10:53stage yet. We're still at this stage of trying to build the product, understand who our user is, and I think there will become a time where we start looking really deep into these metrics and starting tightening up all the funnels and, you know, what happens at every stage. But right now, I think we have a good understanding of our user and who you know, how they wanna use the products and, you know, we can see that

11:10in the in the revenue metrics. Right?

Bootstrapped: no funding raised

11:12Mhmm. How much have you raised or are you bootstrapped today?

11:15No. We haven't raised any money.

11:17I love that. So, any plans to raise? No. What if someone that was hyper strategic came along?

Investors as cheap strategic talent

11:24They did. No. Was joking. No. They did. Actually, I should I Well, why didn't why you why wouldn't if if someone culturally

11:31if someone culturally aligned with you and could help get your product into the hands of more creators and you like the deal terms, you'd still be opposed to you'd still be opposed to taking outside capital.

11:44So let me this is the way that I'm looking at it. I see a very comfortable, like, I I kinda see a decent path for the next couple of years to get to the 10,000,000 ARR, and I think there's a very good possibility we're gonna get there and we're gonna get there relatively efficiently. You know, now is not the right time. We haven't literally, our head of growth hasn't even started yet. We haven't even started doubling

12:02down on acquisition channels. Like, once we do that, I'm gonna feel really comfortable. Yeah. I just feel like it's too early. It's just way too early. Like What if so so here's one thing. Here's one here's what Capital's not gonna make us grow any faster right now. I can't see that happening. And in terms of acquisition, if we were to entertain that now, it's way too early unless the revenue multiplier is really, really good. Right?

12:23Well, okay. So so at all fairness, I think you're missing, like, a critical point, though. What if someone that came along that could be your head of growth but is already wealthy and has had success, so you can't hire them? You could not get their strategic thing without letting them write a check to invest in the company. So then you're essentially not even paying them a salary. They wrote you a check to invest, and they over

12:47time actually become your full time head of growth. Why don't founders in your stage ever think about the fact that letting someone put in money is a much cheaper way to get very smart talent on your team?

12:57Yeah. So, I mean, like, I think it depends.

13:02I've emailed Gary V 50 times. Yeah. He's not gonna be your head of growth.

13:04He's he's gonna Yeah. Kind

13:21of. I think the way that I think about this is, like, the people that you're talking about, they've already done it. Right? They don't wanna do it again. They might wanna do it again, but we need to find the the people who are gonna step into their shoes, who is gonna be the next dot dot dot. And, like, I actually think we've been very successful at finding and hiring those people.

13:34I don't know who these people are that you're talking about, but I'd love to know who they are.

13:39You look at head of growth at GaryVee, not GaryVee, but the head of you look at everyone who's in the third, fourth, and fifth spot.

13:55I think we've I think I think, like yeah. No. I I get what I get what you're saying, but I I feel I feel I feel good about who we've just got as our head of growth and who's been trained by the best. So yeah.

Churn and one-year retention

15:21Are folks sticky once they join? What what's the what's the churn look like?

15:26Churn is about 13%, so, you know, much higher than a normal SaaS company, should we say. But, you know, like, the way that we think about this is is you work in a marketing department, you get asked to subtitle a video or clip a webinar or whatever. You come on, you do the job, you pay, and then you leave. Right? And actually, I'm gonna put our churn messages on our website as testimonials because I think they're

15:47really good. And, you know, we're happy with people using it once, but the reactivation rates are great so they come back. You know?

15:54So why do you choose to measure churn then on a monthly basis? If they always come back, why not measure it on an annual basis and measure it as do they create at least 10 videos per year on the platform?

16:05Yeah. I mean, it I suppose you you're right. But it's just because we haven't been, like, super, super data driven on this sort of stuff.

16:30We're talking just to figure, you're talking 13% per month. Right? So about a you churn through your entire customer base each year, about a 150% annual churn?

16:36No. We retain about 30% of so the people that first joined a year ago, we got about 30% of that first cohort still on.

16:49Exactly. You your top of funnel is so wide. You're getting some people that only just come in use it once in a while. But for people that signed up a year ago and stuff, you you have about 70% churn, 30% retained.

17:04Very interesting. Are you doing any experiments?

17:06That's that's that's stacking up as well. So, like, you know, the product we had a year ago is not what we have now. Right? So that's we can see that cohort by cohort getting much, much better.

Growth: content SEO and YouTube

17:25Yep. Besides your watermark on videos, are you doing any sort of other tactics to drive growth, paid marketing, anything like that? No. We haven't done any paid. Maybe that's something we experiment with in the future. Mainly content, SEO, you know, as I said, building out this sort of like jobs to be done framework where, you know, people will have a job. We just need to intercept them. We also have a we're doing really nice stuff on YouTube at the moment.

17:46Alec, incredible. He's been making YouTube video for us every single day for, like, four months.

17:48Alec. Oh, he's incredible. He googled social media jobs in London, and we were the first link apparently. And he's been making a one YouTube video for us on our YouTube channel every day. So if you go on to, like, YouTube and put, like, auto subtitle video, he should come up.

18:05Hold on. What's your YouTube account? Is it VEED Studio?

18:08Yeah. Yeah. Yeah. VEED Studio. Yeah.

18:34So, I mean, would you credit the YouTube to one of your number one acquisition channels?

18:34I believe it will be. Yeah. And I the other thing that's super interesting about YouTube is, like, we're we're getting the number zero spot on Google with it. Right? And we've been experimenting on how to do that, and it's just super powerful, especially when a lot of the search terms are at video. It's very natural to show a video, you know, for Google in that in that space.

18:56Yep. Good stuff. And also catch captioning those videos as well and putting those segments in it also resolve search terms as well, and they can Google can give you the perfect part of the video, which is great too.

The Famous Five

19:04Yep. Let's let's wrap up here, Sabba, with the famous five. Number one, favorite business book.

19:09I read Seven Powers recently, which is the foundation of business strategy, which is a very good one about defensibility and, you know, thinking strategically about your business.

19:19Alright. We will we will wrap up. You just learned about VEED, again, a company that's passed $1,300,000 in ARR. They have over 5,500 customers helping people quickly create audiograms for their podcasts for marketing purposes, continue to scale, totally bootstrap team at twenty today.