SaaS Interviews with CEOs, Startups, Founders
Document Automation AI SaaS Hits $50k MRR in 12 months
08 Jun 2023
Chapter 1: What is the main topic discussed in this episode?
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Guys, Doxy.ai launched back in 2021, won the Nashville Startup Competition, caught $120,000 there. We're doing about $5,000 a month a year ago, now doing $50,000. That's $5,000 per month across eight customers. They help you automate anything that relates to paper, right? So they say it is sort of like the GPT automated AI bot that takes care of all of your paperwork.
Right now, focused on, sounds like insurance industry, where there's a lot of paperwork that historically hasn't been able... We'll see where it goes from there. They're charging $15,000, $100,000 signup fees, $75,000 pre-seed round raised back in 2022 at a $10 million cap. Hey, folks, my guest today is Austin Ambrose. He's building an AI-powered paperwork employee at doxi.ai. That's doxi.ai.
Austin, you ready to take us to the top? Yes, sir. All right. What is that? What's a paperwork employee? So the official term used in the industry is intelligent document processor, IDP. And effectively, the mission of the company is to put paperwork on autopilot. So that could take the form of a variety of ways.
It depends on the nature of the paperwork and the workflow that it's associated with. And so give me an example of a customer that uses you today and what paper workflow they've automated. Sure. So one of our clients is an insurance company. They get all of their applications for coverage to a designated email inbox.
Typically, whenever someone applies for insurance, they send in some supplementary documents, proof of address, driver's license, a couple of things like that. So Doxy will monitor the email inbox. It will read whenever an email comes in for applying for coverage, it'll read that email. It'll read each of the corresponding documents.
It'll then calculate a rate that can be offered to the prospect based on the information provided. And then since people are human and forget to submit things, it'll automatically draft an email back to them. saying, hey, this is the rate that we can offer you. If you submit X, Y, and Z pieces of additional information, we might be able to offer you a better rate.
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Chapter 2: How did Doxy.ai achieve $50k MRR in just 12 months?
Okay, interesting. What does your average customer pay today? Um, honestly, that's, uh, that's, um, that's tricky because we have, uh, we have, uh, we have some clients that are, you know, only paying 3000 a month and we have, uh, other clients that that's kind of our, our floor I would say is around the, the 10 to 12,000 pages a month is kind of the smallest client that we've seen so far.
And then we've also got, uh, we've got another client that's, um, paying close to, or, well, they just signed, but they'll be paying close to a hundred thousand dollars a month per, um, yeah. Once they reach full maturity. Okay. What would they start out at, though? They're going to start out at $12,500 a month. Interesting.
And are those the two customers you have today, or do you have more customers? We have more customers. As far as the total number, I should probably know that off the top of my head by actual numbers. What's the range? Less than 10. Okay, got it. So when did you guys launch? We launched technically 18 months ago, but we have been refining the product like mad.
And we actually started off as known as SlipBot. And we recently rebranded. So when we started... We were limited to one document type in one industry. And that was the reinsurance slip in the reinsurance industry. Um, and we, we were making strides with that. We won startup showdown in Nashville. We beat, there were 300 companies that entered. We came in first place, $120,000, uh,
panoramic ventures um but we we still were only limited to the reinsurance industry at that time and you know it was a great niche but uh there was not uh we were not picking up steam like we are now we uh started working with um a management consultancy firm that is been largely involved in software purchasing decisions of several of the top 10 or top five reinsurance companies in the world
And so they brought us some of their toughest documents that people have been unable to crack throughout the years. And by the time that we refined the product to the point that it was able to handle those documents, we realized that we could take on any document in any industry. And so three months ago, we rebranded to Doxy. And now we're definitely picking up steam.
But the company back when you filed with Delaware or wherever, when was that? 2021? That was... Yeah, that was... Yes. 2021. 2021. You fund yourself early with 120K from the National Startup Competition. That was also in 2021? That was in 2022. That was actually this past September. Okay. And have you bootstrapped since then or have you raised any equity?
We raised 75 grand from an angel investor. That was, I believe, July 2022 or June. Okay. How do you determine the cap on that or the paper that they sit on? It's on a... The vehicle we're using is a safe with a $10 million post-money valuation. Okay.
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Chapter 3: What is an intelligent document processor and how does it work?
$10 million cap, 20% discount? No, no, no. I was going to say 24-month conversion date. Oh, interesting. Is there a discount there or no discount? I do. I have no discount. No, that's great. Okay, cool. So you get that in. And was there a strategic value there? Obviously, you want to keep as much equity as possible. Why even let an angel in?
Um, we, we knew that we had, uh, we knew that we had a ways to go with a product development and, um, it was just, it made, it made the most sense, you know, raise money when you need it. Um, when you don't need it. Who's we, you keep saying we, how many co-founders? Uh, there's two, two co-founders, um, Isaac kicks and myself. Um, and then total, total employee count.
Now I believe that we're at 11 full-time and we've got an additional four or five, um, part-time contractors on the sales side. Isaac and when you were negotiating with him, the hardest part about co-founding is negotiating equity at the start. Did you guys just split 50-50? No, Isaac has more than I do because he's the technical one between the two of us and he's the real wizard.
Like 60-40 kind of split? Yeah. Okay, very cool. That felt fair to you at the start? Yeah. Very cool. All right, moving forward. Again, you've got 11 folks now. You've got eight customers. This would be interesting. Across your current paid customers, how many pages are you processing monthly? Total monthly, I believe that is somewhere. Let's see here. I should know the answer to that as well.
I honestly don't know the answer to that. Let me think about that. Is it in the millions or hundreds of thousands or tens of thousands? It's in the hundreds of thousands. Okay. Hundreds of thousands per month. Okay. And so what does that mean in terms of translating that to revenue? I mean, if I take eight customers, you know, paying, well, you know, somewhere between 3K and 10K.
We're at about 50K MRR right now. With the client that we just signed on, whenever they reach full maturity, that number will be at about 150. And if you're at 50K of MRR today, where were you exactly a year ago? Do you remember? Exactly a year ago. Let's see here. It's...
exactly a year ago i think we were only like uh like four four or five thousand yeah well that's good growth it sounds like the rebrand is working nicely which is great talk to me about the setup fee though this feels to me like that would make it really hard for anyone to try you and sign up they have to spend 15 000 to 100 000 just to get set up yeah so um it's the you know it's actually a lot cheaper than what our competitors are charging one of our competitors is um
Well, I'm not going to name our competitors, but one of our competitors is charging like $200,000 to $300,000 for implementation. One of our competitors is probably the market leader. They have like a million dollar minimum. Who is that, the market leader? I mean, I guess it's up for debate, but you have Instabase, Indigo Data. Those are probably the two biggest companies. Okay.
So they both, you're just comping based on what they do. One's $250,000 set up, one's a million minimum. Well, comparing in terms of the expensive is relative, right?
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Chapter 4: What strategies does Doxy.ai use to price their services?
Um, There's a million ways that those could fall through. I don't know. I try not to think about that stuff. How are you managing burn today? By just living very lean. Lean startup for life. You're not paying yourself? I took my first paycheck. I think it was less than a month ago. Two or three weeks ago, I took my first paycheck out of the 18 months that we've launched.
Are you guys burning money today or are you profitable? Um, with this new client that we just signed, we will be profitable, uh, here in like, I think it's should be about a month. Okay. How do you think about that? You know, balancing profitability versus growth? Um, I, I try to keep a very tight gauge on team morale. Um, and so, you know, they're,
I don't think that we need, I'm much more, I'm much more concerned with making sure that the people are happy with their, their salaries and the people are feeling good about their, their upward trajectory with, with what we're doing here than I am about, you know, paying for big PR releases or paying for, you know, the flashiest, you know, software packages and things like that.
Obviously there's a bit of a balancing act there because, you know, you give your team better tools are going to be, you know, they're going to be feeling happier with, with, with work, obviously, but, that I try to, it's, it's definitely about the people. Yep. All right. Very good. Let's wrap up here with the famous five. Number one, favorite book. Favorite book.
I'm going to say the monk who sold his Ferrari. Yep. Number two, is there a CEO you're following or studying? CEO that I'm following or studying a lot. I can't boil that down to one. Number three, what's your favorite online tool for building doxy? I wish I had a less cliche answer, but slack. Number four, how many hours of sleep do you get every night? That varies. We'll call it seven.
All right. Fair enough. In situation, married, single, kids? Single. Yeah. Gosh, I can't. And how old are you? I'm 27. All right, Austin. Last question. Something you wish you knew seven years ago when you were 20.
ai was going to revolutionize everything guys doxy.ai launched back in 2021 won the nashville startup competition called 120 000 bucks there we're doing about five thousand dollars a month a year ago now doing 50 that's five zero thousand dollars per month across eight customers they help you automate anything that relates to paper right so they say it is sort of like the gpt automated ai bot that takes care of all of your paperwork right now focused on sounds like insurance industry where there's a lot of paperwork that historically hasn't been able
to be automated we'll see where it goes from there they're charging fifteen thousand hundred thousand dollar sign up fees seventy five thousand pre-seed round raised back in 2022 at a 10 million uh cap um we will see where they go from here austin thanks for taking us to the top thanks sir
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