How Whippy AI Reached $4M ARR with 600 Customers Fully Bootstrapped (Interview with Co-Founder David Daneshgar)

Introduction to David Daneshgar and Whippy AI

Nathan Latka

00:00Guys, David in 02/1011 was the height of actually his poker career. One, the world's poker in 2008, which was great. Use that money. So I'm gonna go to business school, sharpen up here, then launched a company called Bloom Nation in 2012, stayed there until about 2020. They raised a bunch of money. There were three founders. They got really diluted. The three founders owned about caught under 50% of the company when he left and ultimately launched Whippi

00:23AI, which is now helping folks like doctors offices, right? Do better marketing. Also use the platform for operational experience. He's currently got about 600 customers paying an average $600 a month, but clear enterprise motion built in area already has customers that are paying more than $100,000 per year. He's hoping to expand in that market and drive revenue growth this year in 2024 of over 75%. They're at about 4,000,000 run rate today, from 2,000,000 a year ago

00:47and about a million before that. So good growth, all bootstrapped, which we love. Hey folks, if we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I

01:13raised a large fund to do non dilutive deals with b to b software founders. So far, we've invested in over 400 software founders totaling a 150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. Hey, folks. My guest today is David Danischka. He's a former WSOP

Transition from Poker Champion to Entrepreneur

Nathan Latka

01:39champ, cofounder of bloom bloom nation, and today, cofounder of Whippy. David, you already takes the top?

David Daneshgar

01:46>> Yeah. Yeah. Go for

Nathan Latka

01:48Well, I did not know you played poker. What year did you play?

David Daneshgar

01:51>> Yeah. I was a professional poker player between 2005 and 2008. And then in 2006, I was ranked top five. In 2008, I won the World Series of Poker, so it was super fun. Couple of

Nathan Latka

02:02years. How much is skill and how much is luck?

David Daneshgar

02:06>> I I think it's, like, classic, like, everything else. The short term, it's a lot more skill dominated. It's hard to see the variance. But sorry. Short term is more skill based luck based. Sorry. Today's not a long day. But long term, yeah, skill based. Like, to see a poker player win millions over a long term over a certain long number of hands is definitely very skill based, and It was a fun fun time actually.

What Whippy AI Does and Who It Serves

Nathan Latka

02:29That's great. Alright. So let's get into Whippy. Maybe tell us what the product does, maybe through the eyes of a customer that uses you today.

David Daneshgar

02:37>> Yeah. So it's being used basically, a lot of businesses are looking for AI and automation, and I call it functional. They're using, like, CRMs that are not the most savvy. So they have, basically, these databases, and they can't run automation. So we'll integrate and be able to run automation, text automations, voice automations, email automations, workflow automations, basically. But we started with text, recently added email, now adding voice, Voice AI. An example could be like a staffing

03:05>> company where an applicant comes on Indeed and they need to qualify them and ask questions, but a person can get them right away. And before they apply to a 100 other staffing companies, the text, email, voice will come in to collect all that information and add it to their database. So that would be a good example of how how Whippy works.

Nathan Latka

03:21And so are you are you working specifically with, like, see BodyProf chiropractic. Are these physical these are physical office dentists, things like that?

BloomNation: Raising $20M and the Cost of Dilution

David Daneshgar

03:29>> Yeah. Most of them, at least in the early end, are you would think of it as, lawyers, dentists, pharmacies, insurance companies. You're correct. Like, the old old school world meets new school technology.

Nathan Latka

03:41Mhmm. Mhmm. And and what got you into this? I mean, you, in between poker hands, run a legal practice or a dentist shop or something?

David Daneshgar

03:49>> No. No. But I think the one experience I had is after poker and before this, we started a company. This one we bootstrapped, but the last one we raised about 20,000,000 from Andreessen, Spark, Ronnie Conway, a bunch of people, and it was helping local florists. So I think there, when I looked at how they communicate and how they can be more efficient, retention, stuff like that, I noticed just things were really manual. And we our first

04:11>> foray was in text messaging because just that's where you get the leads quicker. That's where you get action quicker. That was, like, the lowest hanging fruit.

Nathan Latka

04:18Mhmm. Interesting. And I guess close out the Bloomation story before we dive deeper into Whippy. So how much did you raise there, and what what was the end story there? What happened?

David Daneshgar

04:27>> Yeah. So we raised about 20,000,000. I actually departed. I was a cofounder and CRO, and I think just decided after six or seven years wanted to start something else. So I left. Both my cofounders are there. I think they raised around after I left. So, yeah, it's still there. It's still intact. I believe it's about a 100 people, employees when I last checked. But I think the one thing for me is I wanted to build something

04:51>> a little bit differently, bootstrapped. There was two things I wanted to do, not raise money so I could decide my own fate and how I wanted to do stuff. And secondly, the addressable market size. I think we were really specialized in the florists, and I think BloomNation, as I was leaving or after, was trying to get in other industries, but that was difficult. I think here we started with something super broad, like communication, and then we

05:13>> narrowly defined the use case, which was challenging in itself to start, but I think allows it to scale scale user without like hitting hitting roofs or hitting a small small industry. But, yeah, the company is still there and excited to see them continue to grow.

Bootstrapping vs. VC Funding: Lessons Learned

Nathan Latka

05:27I'm not asking you to throw the VC investors under the bus, but I do think that founders, you know, VC money is I think the best marketed money in the world. And for every one that raises, there's a thousand that are profitable, happily bootstrapping at 5,000,000 run rate. You have the foresight or just the site in general to basically have both. You've seen both worlds. What advice would you give to someone today looking at raising versus

05:50not?

David Daneshgar

05:51>> I think the best thing I've ever heard someone say is optionality. So it's like if you don't raise, you have the option. You can do it on your terms. You don't look needy. So I compare it a lot to going to a bar and talks about you don't need to meet anyone. And, generally, things come to you.

06:07>> Like, right now, I think I've had three or four emails in the last day just on family offices. I've had like, just looking. And when you don't need it, they want you more. I think that's that's part of it. I think this the second thing is just, I think, you need to make poor decisions. I don't wanna throw them under the bus, as you said. But when someone starts a company, if someone gives them $5,000,000, I

06:29>> think they make poor decisions. If the only way to hire people is through customers paying you on contracts, means that you have to actually build something that people want. You have to get a credit card, and they have to pay you. So it's much more difficult to start. But I think once you get to, like, the as you said, like, the three to 5,000,000 AR and you scale, you build product better. You make better decisions. You're

06:49>> much more comfortable. Like, even on sales and acquisition, you look at payback and you look at things that matter. You look at your p and l a lot. It's it's you you actually act like someone like your dad, how he ran a business. Right? But actually with new age technology. And if you can do the both and scale and get past that chasm, I think it's just lights off. I mean, you can do whatever you want.

Nathan Latka

07:08Well, yeah, forgive me for putting on the spot and doing this analysis live. I'm gonna make some sweeping generalizations generalizations here so the audience can learn with us. I mean, three co founders, right? Let's just, you know, twenty ten you found it. Let's assume just for the sake of argument, split up maybe 33 each, which maybe you didn't, but let's say you did. And then you do the seed series a, maybe a pre seed. I mean,

07:27pre seed is 20% dilution, Series a is

David Daneshgar

07:30>> I can tell you. Yeah. I can tell you about it. Tell me the details.

Nathan Latka

07:33What happens is you freaking burn out, and that's what happened to you. Six years.

David Daneshgar

07:36>> Yeah. Yeah.

Nathan Latka

07:37Wanna go start something new.

David Daneshgar

07:38>> Yeah. The the three of us when I left, I mean, cumulatively owned less than half.

Nathan Latka

07:43Mhmm.

David Daneshgar

07:44>> And I think what it was is I can just tell you kind of the path without getting too much details. Like, the first thing we did is as we're raising money, we went to Mucker Labs, which is like I don't know if you're familiar with Mucker, but it's similar to, yeah. Like It it's a local incubator that's done well, actually. Like, they had service Titan Honey, etcetera, come out of there. So they've done quite well, the

08:01>> owners there. But, like, there was a small percentage we gave for base capital, you know, just just the incubator world. Then we raised raised a c seed, series a, and I I I don't know if I would call it a plus or b as well. So you're right. Like, at the end of the day, just the process is daunting. Like, at that point, the CEO has spent a crazy amount of time. I think just the hardest

08:24>> part is actually decision making. Like if you wanna change your path, like if you don't grow, you don't get money. Like I hate to say it, but it's like someone who has the carrot, so to speak. And I I just I think at this point we can scale how we want to and we don't have to worry about like, oh, if we don't have certain growth metrics or stuff like that. Oh no, we can't get capital.

08:43>> If we don't have capital, we can't sustain our burn rate. So I think, but that was our path. It was like you said, getting chopped, chopped, chopped. I think there are paths for that. I think what I'm just learning about is to give advice to your audience is we don't realize that we can do it without it when our backs are against the wall. Like, you're if you're creating, like, hardcore, like, AI hardware or, I don't

09:02>> know, certain stuff, you you may need it. But I think for the majority of software companies, if they ask a little frugal and a little bit of difficulty in the beginning, they're better off long term. And then there's things that I learned even now that I'm like shooting myself for. Like by bootstrapping the company, I'm sure you know about like things like the eighty three election or where you can get a certain amount back. Like, by

09:23>> bootstrapping it, or you can get 10 x what is that that price when you do go to to, like, a c corp. So there are things I'm learning that are other advantages for being a bootstrap company. I think just most importantly, you don't have to waste that time. And they come to you. So that's kind of been my realization. It's harder to start. Mhmm. Mhmm.

Nathan Latka

09:44How much of those initial, the Mucker Labs, then the seeds, how much of that was you guys, I mean, you maybe look back and say, know, it would have taken us longer, but we could have done it at Bootstrap. But a lot of, in my opinion, raising money, the reason that especially first time founders do it is it's actually just, it makes them feel better. It makes them feel like they're doing the right thing. They can

10:02convince people to give them money, then they sometimes stick in a bad idea for too much time.

David Daneshgar

10:06>> Yeah. So I think the main reason we did it, the cardinal sin there, is none of the three founders were technical, which by the way, like ten years ago when I came out of the University of Chicago and we started out of there and, like, Grubhub or Etsy were just starting and you're building a marketplace business, there weren't as many no code and API tools as there are now. So it's harder to start. So you had

10:25>> agencies. You had so I think there was maybe some reason for that. But I think if we were starting that now, there's probably no reason with all the tools. Also, my co founder now at this company was someone that worked at my last company and is highly technical. So the skills are completely different. So I think that was part of the reason why we we raised the capital. And I think you're right. Like, the last thing

10:46>> and I can see you smiling. But the last thing is I think it was just more like that's what we were told or that's what we saw was sexy. And I think now again, I don't wanna throw them under the bus because there are definite reasons why. But I think there are better reasons to try to figure that out with contracts, with p and l, like doing it that way. Because I think when you finally unlock

11:08>> something real and you really need to scale on capitals at your disposal, you're giving less dilution. Everything is really clear in terms of how you're gonna scale that money really is the necessary fuel, and it might not be at that point either.

Nathan Latka

11:21Yeah. I mean, all disclosure. I mean, you're not buying a 100 wind turbines you have to go install to start helping florists run their companies better. So it's not like it's capital intensive. I don't think so unless I'm gonna know about capital intensive at the start. But look, lessons learned makes a lot of sense. I guess, what year did you leave? Was it 2016?

David Daneshgar

11:39>> No. No. No. I was so my kind of path I'll just give you my path in a nutshell. It was, like, 2008, I won the World Series of Poker. 02/2012, I went to the University of Chicago for my MBA, and then we started it in 2013. I left in right right during COVID. So I'd been there, by the way. The company's been there. Company's actually been there for now for, like, ten years. So

12:02>> but I left in 02/2020, and started this kind of in the midst of COVID with some again. And when we started, it wasn't exactly this idea. Myself and my partner were testing different ideas, but I think this really took hold at the end of twenty twenty, twenty twenty one.

Nathan Latka

12:17Mhmm. Mhmm. That that makes a lot of sense. Okay. So going back into HelloWhippy today, describe to me how you guys charge. Right? So what's the average customer pay you per month or per year?

How Whippy Got Its First Customers

David Daneshgar

12:27>> Yeah. Yeah. Sure. So even the the my email is that the company is now gone gone to Whippy. So it's Whippy. The domain is whippy.ai. I would say right now we're moving more upmarket. So average MRR for a customer probably is around $600 a month. So $7.07 I know between five and ten k hours. I'd call that SMB. But we are starting to have customers that are are are north of 6 figures ARR. So basically moving

12:54>> up more enterprise market.

Nathan Latka

12:56What's the

12:57way we do land on that deal? So some of do have customers paying more than 100,000 per year because you've got them paying for what API cost. What's the utility base you're saying you sell?

David Daneshgar

13:04>> Not API cost, but what happens is when so the SMB, it's like, why should you use our platform over another texting or automation platform? For them, it's developer cost. So, like, if they were to build off Twilio, they would have to build a communication plan Twilio build certain features, certain stats, and, like, then it becomes, like, can your and the developers, even, you know, a team of 10 and a big company couldn't really build this and

13:28>> get this off. So if they have a specific pain point, that's where I think our our our API comes in. And then we also have happen to be integrated to all the different, what's called aggregators, so, like, we can increase deliverability to a certain degree. So when you put those two together and you're a large company, it's just not worth it's better to buy than build, I would say.

Nathan Latka

13:46That makes sense. And you started onboarding customers in what year? When did you how'd you get your first customer?

David Daneshgar

13:51>> Yeah. So the actual real first customers, and I don't know if they have the best use case for people, but it was just my old customers. So floors were some of the first. You look at retention. Retention wasn't great, and I think the reason we realized is they were using it just for marketing. We saw high retention of people that use this for operations. Like, if the platform came down, we'd get messages within one minute. Like,

Cold Outbound and Competitor List Strategy

David Daneshgar

14:11>> I can't communicate with customers. So I think that started to happen about two two years ago, two and a half years ago, and the hardest part was just finding the use case. It was depressing. Like, I I come from a sales background, so making cold calls, walking into people. But eventually, I think it was a couple of cold emails and sequences, getting databases, sending out sequences, looking at open rates, getting on demos, and then honestly just

14:33>> customizing the software a little bit for that use case. That that helped a lot. And then when you do that

Nathan Latka

14:40But how do you even know which data you had to do something to say, wanna go get a database of lawyers or a database of whatever happened.

David Daneshgar

14:45>> I I looked at competitors. Got it. So it it rather than the the simple thing is rather than go to actual industries, I went to use case. I went to someone who uses this software. Pulled that from, like, built with or just different databases, put them into I think we use Apollo now, but I think then it was, like, Outreach. So Apollo sequences look at open rates, adjust subject lines to see, you know, like, the the

15:09>> hustle hustle type stuff.

Nathan Latka

15:11Well, me what you've searched in BuildWit to get a result of all the sites that that JavaScript was it was installed on. Just give me the name. Come on.

David Daneshgar

15:18>> No. I think the the thing is for anyone here, like, BuildWit's a great tool. And and other tools like Apollo, there's obviously there's also right now, like, a lot of intent based tools. Right? Like, you could look up intent for SMS communication. But for a for for I mean, I just go find a competitor's name. I'd find a competitor's Well, I I think yeah. So I'll give you one example. Because I think two years ago, example

15:40>> would be Zipwhip. Zipwhip was bought by Twilio and went out of business. So there was a feast for all the customers. And, like, we just started this. So I was able to pull a list from Zipwhip and then feed that to someone on Upwork to, like, get deeper into the data. Because I didn't have Apollo back then. And then just, like, blast them. And then they Upwork.

Nathan Latka

16:00You gave that list to Upwork to get emails attached to all the customers.

David Daneshgar

16:03>> Yeah. I think now, obviously, Apollo and stuff, but I I had them do the hardcore. I went on Upwork and had them even fill out their web forms. Right?

Nathan Latka

16:11Oh, got it. Got it. I see.

David Daneshgar

16:12>> I see. Anything. Anything. No. No. Everything. I would text their their landline number, go on their web forms, put them in email sequences, and the Upwork person would use their own tactics, I would say. But now I think they were probably

Nathan Latka

16:24Top title were you targeting? Was it, like, the CRO?

David Daneshgar

16:27>> Well, at the point in time, because they were smaller, remember I started started with, like, five k, it wasn't difficult. Like, if you're going after a lawyer or whatever. If you're going after a staffing person, it was operations. If you're going after a lawyer, you're managing partner. So so I I'd kind of yeah. I mean, but those most of those companies weren't they were, like, 10 to 50.

Nathan Latka

16:4610 to 50 employees?

David Daneshgar

16:48>> In the beginning. Yeah.

Nathan Latka

16:49Yeah. Yep. That makes sense. Okay. And then fast forward today, how many customers are you working with?

Current Metrics: 600 Customers and $4M ARR

David Daneshgar

16:55>> I think we're getting close to a thousand.

16:59>> So probably right now, neighborhood of 600 to 700. So you can do the math on the ARR, but somewhere between three to four. About two x what it was a year ago.

Nathan Latka

17:10That's where you're

David Daneshgar

17:11>> on to

Nathan Latka

17:12600 customers at $600 a month is what? Seven point what does that put you at?

David Daneshgar

17:17>> 3.6?

17:18>> Yeah, somewhere between three and four right now would be ours as well.

Nathan Latka

17:23Bootstrap, right? I mean, is you're in such more of a powerful position today than you were two years in at BloomNation.

David Daneshgar

17:30>> I think they're both different experiences because I think it's I've I've gone and spoke on on both of them. Probably was a better place for me to learn there on someone else's dime, to be honest with you. So that was also not a bad ex, you know, time as well. Yeah. I mean, you have to do the math, but I think you make a good point. Like, if you if you were to do a venture backed

17:51>> company and you raise and you have, you know, multiple founders and multiple like, your cap table is this big. Right? Yeah. You're like, at the end when these companies exit, you you don't realize, but I think the math thing is really a good one. It's like they actually, like, five or 10% of let's even say, like, a $300,000,000 exit. Like, that's not actually huge. Whereas if you're getting a $6,070,000,000 dollar exit, which seems like that's much

18:12>> more attainable, a 100 with private equity and all these buyers, and you have 50%, that's a lot more.

Nathan Latka

18:19You're a poker player. Would you agree with the statement that if you want to, in the least risk way possible, build $5,000,000 of personal net worth, you should bootstrap?

David Daneshgar

18:30>> I think so. Yeah. I mean, I have my own net wealth calculator that I put now ever since I started this. Like, I put my stocks, I put this just so I understand. Think so and I think

Nathan Latka

18:40You want you were pretty wealthy early. I mean, I think in o eight, that price was 625 k. And in, I think, 2011, what did you earn? Like, 2,400,000 on poker back how old were you then? Twenty eleven?

David Daneshgar

18:50>> Yeah. So I think I was basically, when I was at the height of poker, I was in my twenties, and I and I did have a 7 figure bank account from poker. So that was really helpful.

19:01I mean,

19:01>> as long as you

Nathan Latka

19:02say as long as you don't go, you know, spend it on the yachts and all that crazy stuff, you think it's great.

David Daneshgar

19:07>> Yeah. But I think to answer your question, like, I think the answer is yes. I think the harder part is you shouldn't fool yourself. So I think the hardest part that's why the bootstrap idea I like, because it's the truth quick. Right? It's truth serum. The mistake I think most people make, and I was telling this to someone yesterday, is it's like how do you price and find product market fit? If you go to someone and

19:27>> you ask, hey. Would you use this? 99% of them are not gonna offend you. They're gonna say yes. I mean, who's not gonna tell you that at that dinner if they're your friends or something? But then if you go to someone, you're like, okay, I built this at the end of the call. Okay. Cool. Like, here's the Stripe link. It's 6,000. Do you wanna put in your credit card? Like, the truth really hurts or or you

19:44>> see that. And so I think with the bootstrap thing, the other thing is you just don't have a lot of time to waste. You have to get to the truth quick because your cash flow, your cash statement is the ultimate sayer of if you exist or not.

Nathan Latka

19:54Nailed it. Talk to me as we wrap up here quickly about growth. You're at about 4,000,000 run rate today. Where were sorry, revenue today. Where were you about a year ago?

Growth Roadmap and Future Channels

David Daneshgar

20:03>> It was about half. So we we we doubled in the last twelve months. I think kind of on our our roadmap is probably, I would say, think about 70 to 75% this year and maybe 50 the next. But you know, within the next twenty four months, definitely, we wanna be at 10,000,000 in ARR bootstrapped as well. So

Nathan Latka

20:20And so I guess you broke the 1,000,000 run rate in 2022? Yeah. That makes sense. Real quick. How do you drive 75%? People say you can't bootstrap and also drive crazy good growth. What do you how are you gonna drive 75% growth? I

David Daneshgar

20:34>> think that's that's a good question because in December, I presented this company. I think it's just different channels. So here's my first question for most of the listening, but it's like, what what is the channel that people use? Let's just call for b two b sales. We started with outbound, which is different from a lot of people. Like, we started because of BloomNation. Again, a blessing of BloomNation, like cold calling, cold emailing, like, as true SDR,

20:55>> and I was the AE. I think now we're starting to see inbound, but I think with our API, partnerships, trade shows, outside sales, like inbound, like those channels that most people rely on in the beginning are things that we haven't even tapped yet. So I think partnerships will be a big thing. Because as we go to different systems and we have mutual customers and they're missing stuff in their system. Right? If you're a accounting

21:19>> CRM and you don't have this, this, and this, you can now use our API. You push people to us. There there could be like an affiliate rev share there. That and white labeling, stuff like that, I think, would be a big part of the growth over the next twenty four months.

Nathan Latka

21:32Alright. Good stuff here. Let's wrap up, David, with the famous five. Number one, your favorite book?

David Daneshgar

21:37>> My favorite book? I think the the I mean, the I'll just say the the Shoe Dog one. Nike is actually a solid book.

Nathan Latka

21:46Number two, is there a CEO you're following or studying?

David Daneshgar

21:50>> I think I'm always, for better or for worse, looking at what Elon says. I think it's pretty amazing what he's done.

Famous Five: Books, Tools, and Advice

Nathan Latka

21:56Number three, what's your favorite online tool for building Whippy besides your own?

David Daneshgar

22:01>> My favorite online tool.

22:06>> Well, yes for example, haven't done inbound. So yesterday, we just started looking at SEMrush, which was pretty insightful.

Nathan Latka

22:11Yep. Yep. We shameless plug. We'll have Eugene, the president of SEMrush speaking at SaaS Open on March 28. You guys wanna meet him in person? Number four, David, how many hours of sleep do get every night?

David Daneshgar

22:25>> When we started this, like, four to five, but I think now it's more six to seven.

Nathan Latka

22:29Alright. And what's your situation? Married, single, kids?

David Daneshgar

22:33>> Single, and my parents are worried.

Nathan Latka

22:36That's amazing. They shouldn't be worried. That's great. And how old are you?

David Daneshgar

22:40>> 40.

Nathan Latka

22:4140. Last question.

David Daneshgar

22:42>> Something you wish you knew back when you were 20 years old.

22:46>> I think my biggest thing that I think about a lot is probably just spending more time learning about real estate. And I think recently, more and more recently, spending more and more time with my family.

Nathan Latka

22:58With your family?

David Daneshgar

22:59>> Parents, my brother. He just had a niece. I just had a niece. Sorry. He has a daughter. So just in general, with people that are more important to you, I would say.

Closing Summary and Wrap-Up

Nathan Latka

23:09Makes sense. Guys, David in 02/1011 was the height of actually his poker career. Won the world's poker in 2008, which was great. Used that money, said, okay. I'm gonna go to business school, sharpen up here, then launched called Bloom Nation in 2012, stayed there until about 2020. They raised a bunch of money. There were three founders. They got really diluted. The three founders owned about, caught under 50% of the company when he left and ultimately launched

23:33Whippi AI, which is now helping folks like doctors offices, right, do better marketing, also use the platform for operational experience. He's currently got about 600 customers paying an average $600 a month, but Clear Enterprise Motion built in Erie already has customers that are paying more than a $100,000 per year. He's hoping to expand in that market and drive revenue growth this year in 2024 of over 75%. They're at about 4,000,000 run rate today, up from 2,000,000

23:58a year ago and about a million before that. So good growth, all bootstrapped, which we love. Check it out at whippy.ai. David, thanks for taking us to the top.

David Daneshgar

24:06>> Awesome. Thanks for your time. Appreciate it.