SaaS Interviews with CEOs, Startups, Founders
DevOps Tool Fig Raised $2.2m in 2020, Now Approaching 100k MAU's, Whats Next?
01 Mar 2022
Chapter 1: What is the growth strategy behind Fig's success?
VCs know that this sort of bottoms-up growth is a very saleable product in the future, and they're willing to sort of subsidize it in the future. So yeah, pre-revenue, but we have tens of thousands of users. You can see on our open source traction as well, people are really engaged in the product in a way that I've built products before I had never seen.
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 Brendan Falk.
He's the co-founder and CEO of FIG. He grew up in Australia, specifically Sydney, did his undergrad at Harvard, and now lives in San Francisco. The company has raised $2.2 million from Y Combinator, General Catalyst, and executive and founders at Stripe, GitHub, Heroku. He's also one of the fastest growing open source startups in the world last quarter. Brendan, you ready to take us to the top?
Yeah. Absolutely. Thanks for having me on, Nathan. You know, I'm a numbers guy. So when I see in a bio fastest growing in the last quarter, I'm obviously going to ask you to quantify that. Measured by what? Who's the source? What's the ranking? So there's a ranking called the Ross Index. They publish the fastest growing open source companies by GitHub stars, GitHub forks, and a few other metrics.
You could just Google Ross Index. And in Q3 last year, I think we were number two or number three. And then Q4 last year, we were... like in the top 10, I think maybe 10th. What factor is going to that? Is it number of developers who contributed at least one line of code to the open source project or like what's the number? So GitHub stars is sort of like a like on Facebook.
It's a bit of a vanity metric, to be honest. But then they also look at GitHub forks. A GitHub fork for non-technical users listening is I go to a project online that is open source. So all of the code is available. And if I want to contribute to it, what I do is I download the code. That's called forking. I make my changes. And then I submit what's called a pull request, which
says, Hey, I've made some changes. Can you review them? And then we review them and we click merge and suddenly they're available to every user. So a lot of our company is open and that means anyone in the world can contribute. And we have been growing so quickly because we've had so many contributors. We're at about 150 or more contributors at this point. Okay.
That's what I was going to ask you. So in Q4, 150 people downloaded the fork to then submit something back to you to approve? No, no, no. So Q4, we probably had hundreds, if not thousands of forks, meaning they downloaded us. And then in terms of contributors, we probably had 30 or 40 contributors just in that quarter. But over the course of our company, we've had 160, 170 contributors.
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Chapter 2: How does Fig engage its open source contributors?
If you are familiar with GitHub, GitHub's model is for individuals, it's free. For open source, it's free. And then for private stuff for teams, it's paid. And we're going to follow the exact same model. So anyone who contributes, we are just totally going to say, this is free and open to the world forever. We're not going to get rid of this. And that's, you know, we've held that.
And there's no, the way this specific repo works, I know it's a short podcast, so I won't go in too long, but it's, you download Fig and you use it for your workflows, but maybe there's a specific workflow that you do every day that not many other people do. And so that's where you go, hey, you know what? I want Fig to be better for me.
So I'm going to contribute the, you know, the what's called autocomplete spec, which is exactly what we're doing. We'll go into it for me. I will contribute it. So the rest of the world can also use it. That sort of makes sense. But it's basically solving your own problem, scratching your own itch, and then allowing other people to also get access to the solution.
So you would only experience a quote-unquote community revolt if you took things that you said were going to stay free and then put a paywall up and made them pay. That's the only time that you would not want to do that. Yeah. I hope we never experience a community revolt. That would be terrible.
But yeah, like that's just, you know, if we say one thing and then two years later do another thing, it's people don't trust us. We need, we like want people to trust us. We want people to have faith. I'm digging here because I think there's a lot to learn about how folks like Sid and others, there's many others that have leveraged an open source community.
It's the closest comparable we have to Web3. where everything's on blockchain, right? Where like you actually vote with the number of tokens you own of the FIG product. But this is a different structure, but it's like the closest bridge, if you know what I mean. Yeah, yeah. There are a lot of different styles of open source.
So there is what Sid is doing at GitLab, where it is sort of, it's company-led. Anyone can contribute. But at the end of the day, the company sort of has the call as to what's the direction we're going. And it's sort of known as the benevolent dictator for life, if you've ever heard of that term. So big open source projects, specifically languages like Python, have a benevolent dictator for life.
Whereas a lot of other open source projects, similar to Web3, they have some sort of set of rules which says, okay, the community has to vote. And then based on the community votes, something is going to happen or something is not going to happen. There are lots of different methodologies.
I think the most important thing is for you to say upfront, here is who makes the final decision at the end of the day. Here are the rules. Because if you don't say that, it just turns into chaos. So how many folks today are full-time at Fig? We're still small. We have a small but powerhouse team. So we just hit seven and hopefully we'll be eight fairly soon. How many engineers?
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Chapter 3: What metrics define Fig's growth in monthly active users?
The terminal is a place that developers use all day, every day for version control of code. I won't go into a ton of depth because I don't want to go too technical, but we make developers lives in the terminal much easier. So how many used it in January? In January, yeah, God, it's already February. People, I mean, we're not saying the exact numbers, but we're in the tens of thousands.
Like our monthly active users are in the tens of thousands at this point, but it's growing super quickly. Like this time last year, we're almost at nothing. And now we're like, these are daily users as well, as opposed to just monthly users. What credit card should I use? You guys have heard this.
If you're scaling with 10, 20 employees, you know that your lead developer needed your credit card data to sign up for Jira or Trello. Your head of marketing needed the credit card to sign up for Facebook ads. Or your head of HR needed a credit card or your credit card data to sign up for that Delta trip you need to take to that next conference.
Nobody understands or understood how to track this up officially and effectively until Ramp came along. Create virtual or physical cards for everybody on your team as you grow and build your SaaS company. Quickly log into Ramp and see where there are discounts you might be able to get that you didn't know about.
for example maybe you save 100 bucks a month on trello or 20 bucks a month in your email marketing provider ramp has all these listed in their platform and you can assign a credit card both virtual or and physical to every employee and set limits that way you can quickly see if your dev tool spend is going up are you spending more on trello or are facebook ads increasing too fast or are you spending too much on travel it's incredible the amount of insight you can see inside the ramp dashboard i got a look the other day and i was blown
away i said i've got a partner with these guys check it out today at nathanlaca.com forward slash ramp that's nathanlaca.com forward slash ramp i'm not going to tell you about the special bonus you'll see but once you go to the landing page you'll see there's a big with two zeros bonus on this page nathanlaca.com forward slash ramp check it out today because time is money and i want you to save both
Help me understand the growth in MAU over the past 60 days. So if you're in tens of thousands in January, what was it in December? Again, not publishing exact numbers, but I can say last month we're up 50% or something like that. So yeah, we launched on product hunt. We had the second product of the month, second top product of the whole month, number one of the day, number one of the week.
So it's just people love what we're doing to the point that they're sharing it with their friends and we're just compounding the number of users by 40 to 50% each month. You got about 375 upvotes on that product on listing. How did that... 375. I think you're looking at 20... Oh, hold on. Hold on. Hold on. That's a different... Yeah. We got 1,000, like 1,300.
That's a different... You got to... Wait. That's the exact same name. July 7th, 2020. Fig. Visual apps and shortcuts for your terminal. What was that? That was really early on in Fig's history. We were still pivoting around. So saying a step back, what is Fig? As I said, we make the terminal easier. The terminal's really hard.
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Chapter 4: How does Fig balance open source contributions with monetization?
Those are people who don't comment, they don't really upvote, but they read it every day. And Fig was at the top of hack and use basically all day. It was a really long day for my co-founder and me. But that got us, I would say, double if not triple the number of users from hack and use as opposed to product time. Yeah. Interesting. Okay.
Talk to me a little bit more about how you funded the business. You're pre-revenue. You got to pay seven employees somehow. So you raised some capital. When was the first round? Yep. We got into YC. We raised that money in April last year as one of the first hit-up banks. So not last year, April 2020. Then we raised Seed straight afterwards, which was September 2020.
We are a really efficient business. Not only are we software. Sorry, how much, Brendan? So how much did you raise? Yeah, we raised $2.2 million. We raised from General Catalyst was our lead, but then a bunch of really cool executives. That was all in 2020? Yeah. That was all in 2020. Yeah. Okay. So we're really happy. We raised from General Catalyst.
We have SV Angel, a bunch of partners from really cool companies like the CPO of Stripe, Will Gabrick. We have the founder of Segments, Calvin. We have... But Brendan, what's going on, right? When I see a company come out of YC and they do a round instantly, you've already given up 7% for whatever it is, 150 grand. So dilution is a real thing here.
I mean, you should be raising every 12 to 15 months. Otherwise, something's wrong. Why haven't you raised in over 24 months? We have so much money. We still have more than 60% or 70% of our money in the bank. We want to grow, but I also don't want to grow too quickly. I trust YC's advice.
They say the best way to kill your company is to just raise a bunch of money, hire a bunch of people when you don't have product market fit. We raised. I don't think we had product market fit straight after raising. Now we're getting really good growth and really good traction. I think we will raise in the next like three or four months. I want us to grow our team before we raise.
So I'm like, we're starting to hire aggressive. We were four engineers in December. We're seven now. So in a month, we've almost doubled the team. So we're like really going on this like quick growth trajectory right now. I agree, but I also don't buy into the metrics of like, you have to, the best companies raise in one and a half years or whatever. Like, Well, it's not the best.
It's not the best. You just do pattern recognition. It's usually a negative signal in the market if more than 24 months go by and you're coming out of YC with 2.2 million raised back in 2020. But I think your answer is also very valid. We have so much money in the bank. This is what I'm saying is, sure, engineers are expensive, but we weren't paying engineers for a long time.
It was really just my co-founder and me. You also look at Stripe and a bunch like Vercel, some of these other really big developer tools companies. Straight after YC, they raised the seed round, but then it took them a long time to raise their series A. Going from series A to series B, that was really quick for these companies.
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Chapter 5: What challenges does Fig face in maintaining community trust?
Not including YC. Yeah. So you've got like 20% equity or so owned by investors right now. The rest, the team, the ESOP pool, all that jazz. Yes, exactly. And if you do raise in the next couple of months, how much would you target? It depends who we raise from.
If we go with a big VC, like a Sequoia and Andreessen, I say goes if we're fortunate enough to go with one of them, they're always taking 20%. That's the way they work. So they'll increase the valuation, but they will, no matter what, take 20%. Versus if you go with... just non-traditional capital. They'll take between 10% and 15%.
And sometimes you can go with an angel like Sam Altman, for instance, who I think is sort of agnostic to this. They don't have fixed capital constraints. They just want to invest and be part of the journey. So I think it really depends at the end of the day who the partner we go with is. Partner is most important to me. Very cool. All right. Well, it'll be fun to see what happens.
And when do you know when it's the right time to put the paywall? To put up the paywall, as I said. Yeah, when's your first dollar of revenue? We will start charging Teams and we're launching a new product next month. It makes it easier to manage your .files for technical listeners. .files are like your developer, non-technical listeners, sorry. .files are like your developer environment.
For individuals, Fig's always going to be free. For Teams, after like 10 plus people, we're going to start charging. And I think we'll get our first paying users in the next couple of months with this new Teams product we're launching. All right, Brennan, sounds good. In the meantime, let's wrap up here with the famous five. Number one, favorite book. 1984 by George Orwell.
Number two, is there a CEO you're following or studying? I'm a big fan of Guillermo at Vercel. Number three, what's your favorite online tool for building fig? Other than fig, because we use it to build it every day. I would say this is more of a personal thing, but superhuman. I think building fig as a company, you need to be really quick and responsive to people.
And superhuman enables me to like 10x the output I can do per day. Number four, how many hours of sleep are you getting every night? I'm big on sleep, so eight hours. That's great. And situation, married, single kids? No, not married. I'm single. No kids. DM me. Don't worry. No kids. I'm 24. 24. All right, Brandon, last question. What's something you wish you knew four years ago when you were 20?
About building companies, it is focused on problems as opposed to solutions. What does that mean? When I was growing up, I used to build apps and I used to think, oh, this is a cool idea. Like everyone's going to love it, but it would, they just be ideas. I wish I knew to focus explicitly on like what YC calls a hair on fire problem, a really, really painful thing.
That's where the best startup ideas come from. It's where the idea for FIG came from. It's the terminal. If you speak to any user who uses the terminal, it is really, really hard. And FIG comes in and just makes that easier. The sale is so easy. So focus on problems, not solutions.
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