SaaS Interviews with CEOs, Startups, Founders
$0 to $2m in 6 months helping SaaS companies hire engineers fast
18 Jul 2022
Chapter 1: What is the main topic discussed in this episode?
That's a little on the edge. But look, if you call yourself a marketplace, the term for that is obviously GMB. But your cut, your rake, you're almost at a million-dollar rake run rate.
Yeah, you're exactly right.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Chad Ingram.
He's had two successful exits. His last one was called Jump, a customer engagement application acquired by reputation.com. He quit school during his final semester to become an entrepreneur and he's never looked back. He's the founder and CEO today of a company called distro.io. He's got two kids and an incredible wife. He's an off-road race car driver and loves to solve problems using technology.
Chad, you ready to take us to the top?
Yeah. Yeah, for sure. For sure.
So are you a software engineer by, by trade or no?
No. So when I, when I quit school, I immediately started teaching myself, um, time YouTubing and just buying books and, uh, quickly learned like, though I could do it, I was slow and it just wasn't for me. So I hired, so I hired developers.
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Chapter 2: What is the main concept behind Distro and how does it operate?
So that's the full marketplace charge. So like the full salaries and everything. So the way we recognize revenue is we take the whole thing in.
Oh, well, that's GMB. Yeah. That's a little on the edge. But look, if you call yourself a marketplace, the term for that is obviously GMB. But your cut, your rake, you're almost at a million-dollar rake run rate.
Yeah, you're exactly right.
Yeah, yeah. It's just been kind of an interesting conversation with some VCs that we started to meet with about how GAAP plays into this. Because we don't escrow the whole money. We actually receive everything. And so because of that, technically we do have to, you know, recognize the whole thing, but then that plays on valuations. Like how does that mess with the valuation?
If we look at the entire gross number, you know, as revenue versus the, the, the take on, on everything. So we'll see how it shakes out, you know, as we have a raised institution. What, what, what evaluation numbers are folks thrown in front of you? That's a good question. I don't know if I should answer that question because we're in process right now.
Well, it's only gotten worse over the past three months. I mean, I'd be shocked if it's gotten better.
You know, yes, but I would say it got worse. the worst a month ago. Everyone was the most spooked a month ago. Right now, everyone's like kind of, well, all right, the market has stopped really falling and we're just kind of sitting and waiting. And then most of the early stage investors are saying, well, it's affecting the late stage guys.
It's not affecting us so much, but I will say this, multiples are down. We all know that.
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Chapter 3: How does Distro facilitate hiring for tech companies?
So multiples are down. So, you know, I think that it's going to settle, you know, somewhere between 15 plus at this stage.
How much is $15 million post-money? Pre-money, yeah. Pre-money. How much are you looking to raise?
So that's a good question. So we think that three will get us to where we need to go. We could definitely take a smaller number because in a little bit more context, we're profitable right now.
How profitable, if you don't mind me asking, how much goes to the bottom line monthly?
So we'll net $15,000 to $20,000 a month right now.
Okay, that's pretty good.
One of the advantages that we have is that we can utilize our own infrastructure to save money with a global team. We've got a decent headcount here in the US for our size, which is like five or six of us. One person is part-time, but then we also have team members also offshore, near shore, through distro.
we can take advantage of those same economics and so our payroll number is significantly lower than somebody else in in our same you know phase and so there's five of you full-time today though yeah yeah well in the us and we have three how many total So there would be eight of us so far. Eight. Okay.
Are you the sole founder? You own 100%?
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Chapter 4: What are the advantages of using Distro over traditional dev shops?
Do you have more than both?
yeah for sure so i initially funded the company you know i i brought them in after you know kind of developing the idea initially but they're really great people and you know both of them were kind of at that point where they're like i need to go do something that i've got ownership of as opposed to joining the employment line and they've done really well they've been how how much have you put in did you put in personally the business we don't mind asking so about 250 is what i said like how did you get so rich like people are going to be wondering where did i get all this money from originally
for me so i sold two companies prior to this okay there you go yeah racing isn't cheap either yeah yeah yeah yeah yeah so um great lessons learned you know had you know yeah it's great lessons learned but i i you know we sold right before the pandemic and then um like was forced to just kind of be at home and it's like all right now we're gonna be home with the family so great yeah and you're saying
You know, we got really, really bored. And I was like, no, we got to do this again. And I had this idea because, you know, so much of my network, they're just struggling so bad. I mean, you know, talking to a friend who who this actually my co-founder's friend, but he's founder of another company.
And he had a senior software developer who wasn't even like crazy, like seven, eight years of experience. and he was making like 150 and he got picked up by twitter for over 300 grand to work remotely in the same geography like how you can't compete with that like there's really nothing you can do about that and it's only getting worse
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Again, both plural founderpath.com forward slash products forward slash valuations. So how are you able to get those engineers? Just because you're going to India or Argentina or somewhere else?
Yeah. So our first cohort of customers earlier this year, we suspected it was going to be more of a cosplay. So we started going to India, really seeding our database to get more applicants and developers. But what we found is that it wasn't a money thing, though they're saving money.
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Chapter 5: How does Distro's payment structure work for developers?
Yeah. But they don't help us hire and find engineering talents. Like the other side of your business is like part recruiting firm effectively. And I assume you do onboarding and tests and you do like ERP related stuff or like applicant tracking systems. Sorry. Sorry. Stuff. Right.
Kind of like, so our product is built is, is,
getting like we haven't we're in process to build some of that so there's some like ats like basic features but we're not wanting to build like a full crm for that like it's we're trying to keep it as essential and simple as possible like we don't want to chase a lot of different product you know themes and so you know for us like it's like all right nail the complication of hiring somebody like getting an offer onboarding that sort of thing like nail that
And also nail the payments, you know, but certainly you could go to deal or remote or something and try and do that if you knew how to gather the right candidates and assess them and that sort of thing.
Yeah. So I'm going to ask you a strange question here. I'm going to see how courageous you are, if you want to play ball or not. Tell me how someone would go around you. If someone wants to use your playbook for finding engineers in Argentina, what would they do?
Honestly, their only option right now is to go to either Fiverr or Upwork and then try and circumvent them. But that's what you're doing. No, that's not what we do. How do you do it? So we, we've, we've figured out a pretty awesome way to hire in country native recruiters. And so who I didn't give you in our head count, you know, so, so, We're much more successful in doing that than us.
Like, okay, so one of our competitors, they started out right before the pandemic, they grew through the pandemic, which was great for them, really lucky time, but they've really focused on a different aspect of technology. They've focused on more of the assessment side and they're doing that because they are spending their way through
you know, marketing, digital marketing, you know, AdWords, Facebook, whatever, to gather applicants. But the problem is, is that only the less qualified people are applying. The really qualified people are happy where they are. They're being recruited, right?
So- So Chad, how do you find that rockstar recruiter in Argentina who's going to go find the best engineers? How are you finding the recruiter?
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