SaaS Interviews with CEOs, Startups, Founders
1305 He Built AWS, Now Raised $9m at $30m Post for IoT Solution, $300k MRR
19 Feb 2019
Chapter 1: What inspired Robert Frederick to focus on connected devices?
He was on the team that built AWS, now taking that same concept and really building. How do I best describe this? He's giving find the utility value to the Internet of Things in terms of what a waitress at a casino could do when they realize a cell phone signal has been in the same spot for four hours and how they drive business results from that.
Or same thing in a hospital where they might have an on-prem solution installed for HIPAA and other privacy regulations and making sure patients get checked up on. hot, hot space, interesting technology, 9 million raise doing right now about, again, 300,000 bucks in monthly revenue.
That's up from call it 250 about a year ago, 15 paying customers looking to potentially raise here later this year, but only after they get to a point where they're profitable so that Robert has all the leverage. This is the top entrepreneurs podcast where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
Chapter 2: How did Robert's early career lead to the creation of AWS?
It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Robert Frederick.
He's the founder and CEO of a company called Circle and has been focused on connected communities of devices, people, and businesses back since 1993.
He was inspired by the balanced future potential of smart connected devices and leveraged this passion to attend MIT to work on projects in the MIT Media Lab and to join one of the first startups focused on standards that would be later called Bluetooth in the late 90s.
The startup's licensed product, Devicetalk.com, was a central server running intelligent agents that used event-based logic to complete actions on behalf of its users via simple commands and conditional triggers. All right, Robert, are you ready to take us to the top? Oh, yeah, sure. Good. All right. Tell us about this obviously impressive background. Tell us about your current venture.
What is Circle and how do you make money?
Oh, well, Circle is a middleware solution. It's a platform, a SaaS platform, if you know what that means. And we license our technology. We license templates that leverage that technology across multiple verticals, automotive, smart buildings. retail, healthcare, and of course, developer services like SDKs and APIs so that others can actually benefit and generate their own solutions on top.
And you're pure play SaaS or is there a pay-as-you-go professional service component?
Actually, we're one of the few that has our license pay-as-you-go as well as we have hardware components that people purchase and license and or lease from us over the course of multiple years. So we tend to be in multiple sort of areas, not just
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Chapter 3: What is Circle and how does it generate revenue?
Let's shift real quick to kind of the business history. So starting first, I believe you're very much in the enterprise space, but I want to confirm that. What's the average customer paying you per month? I'm guessing it's thousands, if not hundreds of thousands.
Yeah, it depends on the average customer can be anywhere from tens of thousands a month to we've had hundreds of thousands as well.
Okay. And why would someone pay 20 grand versus a hundred grand? It's like number of captured leaky devices per month or what's the metric?
It's the usage of the servers, the number of service servers that are needed in order to license. And I do want to basically say there is a difference. We are unique one more time because we do both cloud as well as on premise and service capabilities. So you don't have to go out to the cloud if you have your own hardware on-prem. HIPAA, security reasons, all kinds of stuff.
Exactly. And that's your hardware on-prem solution. And that's our differentiator. Great. Okay. Fair to say though, you just give us a big range. Fair to say minimum though, it's 20 grand a month and then everything else is north of that.
It's tens of thousands.
Yeah. Okay. And then when did you launch this company?
Uh, 2013, uh, after, um, doing a lot of research and, uh, bootstrapping my, uh, the previous company for four years. Which one was it? Was that device talk? Uh, that was, uh, it was called grip wire, uh, before this. And then we port, we basically raised money in 2013. Okay. And the new, the new idea. Yeah, exactly. Did you shut down the old company or it's the same?
Yeah, it's, it's pretty much every, all the employees, everyone moved over into the new entity. Clean cap table. Clean cap table. Okay, good. So, so shut it. Very important. Very important.
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Chapter 4: What are the unique features of Circle's technology?
Okay. You're aiming for this year. Got it. Okay. Then you just talked about more about customers. How many customers are you serving now today?
Oh, um, are we're, uh, I think just coming to large customers, um, Total customers.
Yeah. Anyone paying?
Uh, 15, 15 major, major customers. And like I said, uh, tens of thousands a month, uh, upwards to hundreds of thousands. So, uh, that's about as much as we can basically cover with our current size.
Well, I mean, I can say, I can say, I mean, you gave me that 20,000 a month minimum earlier times 15. It's fair to say you're north of 300 grand a month right now.
Not, I can't say that. I'm not allowed to.
Well, hold on. You already said both 15 customers and 20 grand minimum. So one of those numbers wrong.
So you basically got it.
Yeah.
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Chapter 5: How does Circle's technology apply to various industries?
And how old are you? 46. 46. Last question, Robert. What do you wish your 20-year-old self knew?
How to raise money at 20, as opposed to, and what stock options actually meant.
Guys, there you have it. He was on the team that built AWS, now taking that same concept and really building, how do I best describe this? He's giving, find the utility value to the internet of things in terms of what a waitress at a casino could do when they realize a cell phone signal has been in the same spot for four hours and how they drive business results from that.
Or same thing in a hospital where they might have an on-prem solution installed for HIPAA and other privacy regulations and making sure patients get checked up on. Hot, hot stuff. space, interesting technology, 9 million raised, doing right now about, again, $300,000 in monthly revenue. That's up from, call it, $250,000 about a year ago.
15 paying customers looking to potentially raise here later this year, but only after they get to a point where they're profitable so that Robert has all the leverage. Robert, thank you for taking us to the top.
You're welcome. Only one change, and that is Instead of Internet of Things, we like to say the Intelligence of Things, which is the next, the next, next.
Guys, there you have it. He's branding it here on the show, Intelligence of Things. The book comes out late 2019.
Robert, thank you for taking us to the top. All right.
Thank you.
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