SaaS Interviews with CEOs, Startups, Founders
Can this new AI tool grow into their $10m valuation?
11 Aug 2023
Chapter 1: What is the main topic discussed in this episode?
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. Guys, Node.ai got going, call it, six months ago researching.
Chapter 2: How did Node.ai secure its initial funding?
They just closed a $500,000 convertible note with a $10 million cap. So call it, they sold 5% of the business. Pretty healthy, though. The question now is, can they get MBA students as their initial ICP target? Can they get these students using the tool? And then after that, can they start turning on a revenue stream here?
Chapter 3: Who is the target audience for Node.ai's product?
We will see what happens. Justin's got experience, though. Two-time exited, first-time exited founder, second-time exited founder, bootstrapped VC. Node is his third project. We'll see where it goes.
Chapter 4: What challenges did the guest face with previous startups?
Hey folks, my guest today is Justin Shum. He's building Node.ai, which extends human reasoning and decision-making abilities. He's building on his own experience. It's a three-time founder, one bootstrap, one exit, and one venture backed. Justin, you ready to take us to the top?
Absolutely, let's do it.
All right, what was the name of the bootstrapped one?
Yeah, ReadyChat.
Chapter 5: How does the guest define their ideal customer profile?
Founded back in 2013, exited it in 2015.
ReadyChat, okay. And what was the, you bootstrapped that, right?
Yep, you got it.
So like no angels, you just put in your own money basically?
Yes, that and a lot of blood, sweat and tears. Yeah.
And how many years was that again, you said?
We operated for three years and then we had an acquisition.
Okay. And did you, I mean, did you guys break a million bucks of ARR at that point or what were you when you exited?
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Chapter 6: What innovative features does Node.ai plan to offer?
We were pretty close in terms of Canadian dollars. If you converted that to USD, yeah, it broke a million. And because it was a hybrid between software and services, we didn't get a huge multiplier on it. It was about 3x revenue for the acquisition.
Okay. This would have been back then.
Bootstrapped entrepreneur. That was a lot of money for us at the time.
Yeah.
Chapter 7: How does the guest plan to monetize their platform?
I mean, what? That's a $3 million deal back in 2017, right? You guys own how many co-founders?
There was three.
I mean, so if you each can pre-tax, take home something like 300K, that's a good gig back then.
Yeah. And in Canada, you get your tax-free up to $750,000. So it was basically all of it in our pockets, which was nice.
That's okay. So I changed my math.
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Chapter 8: What are the future goals for Node.ai and its team?
You each get $350,000 pre-tax and get to keep most of it, something like that.
Yeah.
That's great. Looking back, do you go, man, I wish I kept building that thing. There was a lot of potential there. Did you sell too early or no?
Yeah, I think every founder has seller's remorse, for sure. But it was somewhat of a platform that launched us into other businesses. And all of us are successful in different areas now. So I don't think I have too much regrets.
Yeah, I rarely meet founders that regret their first sale because it creates so much optionality for you, not to mention the cash in your pocket. So all right, you get that done in 2017. And then what was the next company? I guess this was the VC-backed one.
This was actually not. The second company was Ask Avenue, again, in the prop tech space.
Ask what?
Ask Avenue. Avenue, okay. And we had some of the largest enterprise customers at the time, Remax, Royal Page, another massive brokerage with 20,000 agents. And we got a lot of press, won a pitch competition to kick it off. But that one was angel-backed, actually. And it was a Completely different experience from bootstrapping where you own. I own 51% of ReadyChat. Ask Avenue slightly less.
But it's super important to note this, that taking on angels, they have to be the right angels. The angels we took on were not experienced investing in tech. And so they had different agendas, different strategies they were trying to enforce. And so it got pretty messy, pretty ugly. And I actually exited that one willingly and didn't make too much money off of it.
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