SaaS Interviews with CEOs, Startups, Founders
Bootstrapped SEO SaaS Hits $1.8m ARR, 28% Profits!
24 Aug 2022
Chapter 1: What incredible growth did the company achieve in the past year?
Well, this is incredible growth, right? You're doing $88,000 a month a year ago. Now you're doing almost double that. So 100% year-over-year growth, very capital efficient. You've raised way less than what your total ARR is, right? Yeah, of course. You would judge that negatively, I know. But for us, it was like... I don't think it's negative. Yeah.
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 Andy Volpini.
He is the CEO and founder of wordlift.io, which is helping everyone with automating their SEO. Andy, you ready to take us to the top? Totally. Great. All right. So this is a very competitive space. You know, SaaS tools to help with SEO. What's your unique spin? What do customers pay you for? We build knowledge graphs. That's the reason people come to us.
And then using this knowledge graph, we can automate SEO at various levels. And that's pretty unique. I mean, we help you create your own knowledge graph, much like Google does. And this interacts with Google at some point so that you will enter into Google knowledge graph more easily and also reuse the knowledge graph for other SEO or digital marketing tasks.
Why is the knowledge graph important? And can you give me an example of what that might look like for a company? So when you build a knowledge graph, you have these flexible data structure that Google can read.
And by using these data structure, you can also build other services like, I don't know, generating your product description or generating the description for the startup that you work with within the SaaS space. So a knowledge graph is kind of a starting point for your AI strategy, but it's also important for Google because it represents a new site map.
in terms of what are the concepts that matter for the business? How do we index them? What is the data behind the website? And that's way more important as we progress from traditional SEO into modern SEO. And what I love about you guys, you came on the show back in April of last year. You had just, I don't know if you remember this, you had just broken a million dollar run rate.
You remember that? That's correct. That's correct. And most importantly, you told me you and your partner still owned more than 80% of the business, which is great, right? We still do. We still do. That's amazing. That's amazing. And you told me not only that, you're in control. You passed a million in revenue. You guys are also very profitable.
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Chapter 2: How does the knowledge graph play a role in SEO automation?
Is it because they're tracking so many keywords? Or what's the utility base? What's the metric? So the utility base is really the number of URLs. So number of sites per URLs. And we have to build basically a data set on all these URLs. And then we have to enhance the URLs and bring business value that it's at least, I don't know, five times what they spend with us.
And that's what we're looking at. Yep. That makes a lot of sense. So that's your biggest customer. But what does your average customer pay you per month, would you say? So the lifetime value, it's around 1,300 euro. And the payback period will be something between 25 and 26 months. On $180 spend? No, no. I mean, on a lifetime value that it's around 1,300, 1,400 euros lifetime.
Yeah, and then you said your payback was 25 months. Yeah, I mean, the time that he stays with us on average. Oh, not the payback period, just the total lifetime. Yeah, sorry, sorry, the total lifetime period, yeah. Okay, yeah, that makes sense. No, the payback, it's, I mean, a few months, basically 1.5 months on average. Yeah, yeah.
Yeah, so your average customers are paying something like $130 a month. You spend $200 to get them, so they pay back in one and a half months. Yeah, something like that. Interesting. And what is that plan? If someone signs up to you today for $130, how many sites are they probably tracking and using you for?
um they can they can build a graph for uh you know between three to ten website depending on the number of uh you know content types that they need to cover so we we scale also by content type so by looking at the site you know if you just have to deal with products is one thing if you have to deal with products and podcasts then it's of course more more expensive but let's say between three and ten websites
I see. I see. And when you came on about a year and a half ago, this was about 18 months ago, you said you had just passed, I think, 705 customers. How many customers do you have today? Right. So we have more than 1,000 clients at the moment. And today, the active subscription are 1,166. Wow. 1,000. Okay. So talk to us about that growth.
How did you sign up 400 new customers over the past 16 months? Yeah, it's really a combination of activities. Inbound is working terrifically well, of course. I mean, everything that comes from SEO and any initiatives that we do on the inbound marketing is working very well, as usual. We've done participating at The Next Web. We're partnered with The Next Web.
So we usually also get some good generation from events, So I would say inbound and events, and we're starting to kind of look at how we can increase the advertising to get more clients. Well, this is incredible growth, right? You're doing $88,000 a month a year ago. Now you're doing almost double that. So 100% year-over-year growth, very capital efficient.
You've raised way less than what your total ARR is, right? Yeah, of course. You would judge that negatively, I know. But for us, it was like... I don't think it's negative. Andy, no, no. I don't think it's negative. I only think it's negative if the ratio between ARR and what you've raised is out of whack.
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Chapter 3: How does the company maintain profitability despite rapid growth?
Yeah. What is your team size today? How many people full time? So we have basically around 20 people. 13 are kind of the core employees. And then we have other seven, eight freelancer that work with us full time. What do they do?
Um, so we, we basically have, uh, you know, seven in tech and then, uh, you know, we have six that are, uh, you know, looking at a client success, uh, meaning that, you know, kind of the assist the client and help them grow and, uh, you know, do some, some, some activities on top of the license.
And then, uh, and then we have, of course, uh, you know, five sales should be, should be seven already, but we still have five. And then we have a couple, uh, doing marketing. Okay. So you have more, well, that's your whole team then you just give me the breakdown of the full 20 team. Yeah. Sorry. The seven to eight freelancers. What do they do?
I mean, pretty much distributed among these different functions. I mean, it's not that we are kind of consolidating. It depends on also, we're globally based and the team is remote in most cases. So depending on the skills. Yeah, very interesting. Okay, so good. That's five new hires since the last time we chatted, which is great. Let me ask you a question. Where are you based right now?
Now I'm on the beach, but I'm usually in Rome. I'm usually in Rome. Do you guys care about valuation right now, specifically your valuation? Do you think you might raise soon or sell a portion of the company? There is no other tool on the internet that you can use to get a better and higher valuation than FounderPath's new valuation tool.
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Chapter 4: How did the company structure its recent funding round?
We have over 253 deals that went down over the past 30 days, all the revenue numbers, all the valuations, and the multiplier. That way you can go filter the data, find companies that are your same size, what they sold or raised for or at, and then use those as comparables in your decks to argue and debate and get results.
a higher valuation and less dilution, which is the name of the game, less dilution. Check it out today at founderpath.com forward slash products. That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. So let me ask you a question. You guys were doing, when you raised $800,000 recently, about $1.6 million in run rate revenue.
To save that 15% equity that you sold, why didn't you guys consider debt? Because it's a combination of factors. I mean, we can easily get backed at the moment. If I go to a bank, I can get a good deal. And banks actually are looking for us because we bring money in the bank.
but uh it's not just about uh as you know it's not just about the cash it's also about you know the network and kind of structuring things so i mean there is more than just you know the cash if it's just cash you go to the bank you get a good deal if you're profitable you you will not spend much in any case you know the cost of money hasn't been high now it's of course rising back but hasn't been high um so i mean that is of course an option but uh
I always used that in the past, but I think it's also about system. Yeah. So who was that? It sounds like it was a very strategic investor. Who was it? It's Primo Venture. They're quite well-known in the Italian landscape and they can bring us forward, I think, along our journey well while we're here. Yeah. And what's the top thing you think they can help you with? Good question.
Connections, structure, because of course, in order to scale, I mean, I've been bootstrapping most of my businesses, so I know how to do it. But if I have to create a company that it's worth, you know, 10 or maybe hundreds of million dollars, you know, what is the strategy there? And, you know, I need advice on that. And how should I shape the structure?
Because I'm always, you know, looking at high profitability, but I might lose, you know, the focus on, you know, what is the overall business value. And I need help for that. Yeah. So when you say help with business structure, do you mean literally your org chart or just the structure of the business? How much to burn? How much to invest? I think it's a combination of both.
I mean, the org chart is an important aspect. For instance, I would, you know, I rather try to do everything myself and control everything because that's the typical founder, the typical bootstrapper. But then in reality, that doesn't scale. I mean, if you have to move from 1,000 clients to 10,000 clients, what do you need, you know? And you need that kind of help, I think. Yep.
no that makes a ton of sense uh i'm asking these questions because i just i love learning from founders like you i think it's great what you've built that's that's the work that you do i mean depending on the fact that you know you know you you you don't just lend the money you know to the to the company i assume that you you know the advantages that you can also help me grow and that's that that's what i value a lot out of you know
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Chapter 5: What challenges does the guest face in a competitive SaaS market?
I know that, I mean, in order to make also kind of, you know, moving from Europe to the U.S., we'll definitely need, you know, some different kind of help. Yeah, that's a huge use case. People don't know this. You know, we just raised $145 million. We've already deployed $60 million. And of the $60 million we've deployed, yeah, 60% of that, 6-0% is non-U.S.,
Yeah, because I see a lot of value there, honestly. I mean, I think that you should look a lot at companies outside of the US. Yeah, you're an exact great use case, right? It's like a company like you that maybe you want to expand to the US. Well, take money from FounderPath, expand to US, but we'll see what happens.
I don't want to turn this into a sales pitch, but I'm just thrilled for what you've built. You got it capital efficiently. It's incredible. So if people want to check it out again, guys, check out wordlift.io. That's the URL. Give Andy some love for being so transparent on the show. And Andy, though, in the meantime, let's wrap up here with the famous five. Number one, favorite book. Oh, boy.
I'm reading Carl Vonnegut. I love him. I mean, I forgot how much I love him. Who is it? Carl Vonnegut. Carl Vonnegut. What's the book called? It's Mattatoio 5. It's in Italian. I don't know the English. Okay. Okay. Italian author. Number two, is there a CEO you're following or studying? CEO. Well, I mean... I follow many CEOs, to be honest. But yeah, who am I looking at?
I'm looking at a lot of companies within the sectors. I'm looking at people, of course, around Fishkin. It's a good leader, I think, in our space because he got out of SEO. And so it's someone to look after. And also he's a super friendly person that I always like to listen and to read about. Number three, what's your favorite online tool for building WordLift? Ah, boy, that's interesting.
Um, we use a lot of, uh, trial law. Uh, we use a lot of, uh, Zapier. Uh, we use a lot of, uh, of course, uh, we were running all the infrastructure on Azure. This is not really a tool, but it's a, it's a cloud infrastructure is very important for, for companies like us. Yeah. Go. No, that's great. Yeah. Number four, how many hours of sleep are you getting every night?
Now I'm going down to six and a half, but usually I try to reach eight. Okay, fair enough. And are you still married with two kids? Yes, yes. I actually got a wedding a month ago. Yeah, I think you told me you were married, but you hadn't had the ceremony yet. Yeah, we went through the celebration. Ah, congrats. That's very exciting. And did you have a birthday? Are you 44 now today?
Uh, my birthday is on, uh, on the 10th of March. So I'm 45. Oh, you're 45. Okay. I had two birthdays yet. 45. Very cool. Last question here. Something you wish you knew when you were 20. Uh, the life it's easy, you know, that, uh, that once you set a goal and, uh, you have fun with, uh, with what you're doing, uh, you're going to achieve that goal.
Uh, and, uh, and you don't need the old, uh, and, uh, and, you know, the troubles that, uh, you go through, but, uh, it wouldn't help my 20 years old. Guys, Andy's having fun. WordLift.io, playing in the SEO space. They're big competitive advantage graphs, knowledge graphs, and SEO optimization. They have over 1,166 customers today.
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