SaaS Interviews with CEOs, Startups, Founders
FusionAuth is Burning $50k/mo on $25k Revenue in Identity Management Space
07 Jul 2020
Chapter 1: What is the current revenue status of FusionAuth?
we were essentially at zero revenue on fusion off a year ago. Okay. And then now 50 customers at 500 bucks a month, you're somewhere around 20, 25,000 bucks a month in revenue. That's a, you know, pretty, pretty close. Yeah. Okay. You are listening to conversations with Nathan Latka.
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Hello everyone, my guest today is Brian Pontarelli. He's a successful technology entrepreneur currently focused on solving login registration and user management challenges at his company, FusionAuth.io. Brian, you ready to take us to the top? Yeah, absolutely. All right, so what is the business model on the company? Is it a pure kind of SaaS model? It's different.
So we are calling it like a hybrid SaaS or a downloadable SaaS. There's a lot of different terms we're kind of playing around with, but basically it's a SaaS, but you can run it anywhere on any server in the world. Okay. Actually on the server or you spin up a private cloud? Either. You can spin up a private cloud, we can run in our cloud, we can run in your cloud.
So it's that sort of like hybrid approach, but it adds a lot of flexibility. one of the main differences between like a normal downloadable product and what Fusionaut does is a lot of the downloadable products like require a ton of configuration. They're like a lot of development, a lot of code to just even get working.
We feel more like a SaaS where you log into a web interface and you do everything, you know, there. Yeah. OK, so let me ask you a question. If I pay you and I and I take the software and I install it in my own servers and then, you know, a year comes up, do I have to pay you again an SLA, a service license or something? Or do I have it for life for that one payment up front?
You can not pay us ever. Okay. So it's similar to like MySQL model or any of those. It's not open source, but it is just free for developers to use. The only thing you pay for is if you want us to do hosting or do any professional services or you need any type of support. Okay, so you pay for hosting and support.
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Chapter 2: How does FusionAuth's business model differ from traditional SaaS?
We didn't have a name back then. Contact us and said, hey, we really want to support you guys. We love what you're doing. Let us pay you. Okay. And I mean, how did they find you? Did you have like an SEO page set up? Was it a search keyword? They knew you personally? What was it? I think what ended up happening is we had one article that was basically like,
hey, there's a new player out there that's trying to take on the big guys. And because they were looking for one of those names, they found the article and they're like, hey, I've never heard of this, clicked on it, found us. Where was the article published? It was on, I think it was on one of those like comparison sites, like Alternative 2 or like, you know, Programmable Web.
I can't remember exactly which one, but it was, they had done a write-up of us. Alternative 2, interesting. Okay, very cool. And why didn't they like Ping? So, you know, interestingly, a lot of the other solutions just have problems when it comes to some of the features, right? So it's either you can't run it on-premises, right?
So that's a big, big one with like, you know, Okta and some of the others. Ping, you can run on-premises, but it's also pretty heavy. In order to get all the components that they needed, they were going to have to buy four or five different individual products, stitch them together, and that's a huge endeavor. With FusionAuth, Again, we try to make it look like a SaaS, right?
It's like, it's one simple product. You fire it up, you click, click, click, and you have everything from single sign on into like, you know, two factor. You have it all. There's no bolt on packages. You're not getting in the guts and like trying to figure out how to configure plugins. So that's the first customer, that article.
Now, how many customers have you scaled to today just on this product? You know, that's a good question. I think we have about 1500 total customers. Okay. Not including cleans just on fusion off. Just on fusion off. We were at, I think we're at about 200,000 total downloads. 200,000 total down. Okay. Wow. Impressive. Now, I mean, can I take 1500 times that sweet spot of 500 a month?
I mean, that puts you at $750,000 a month in revenue just on this product. Is that accurate or overstated? So we're actually not ready to share revenue yet. We're getting ready to ramp up and let's check back in six months and see where things are at. But the 1,200 number or 1,500 is total active running instances in our production environment. It's sort of what our metric is, right?
Because what we're doing right now- Sorry, Brian, I don't mean to jump in. Like this all the time I get people come on that, and I don't think you're this kind of entrepreneur because you're not in San Francisco and you haven't raised a hundred million dollars and some crazy valuation. But so many CEOs come on all the time and brag about customer numbers, which are not customer numbers.
They're installs or like users. So I guess my question is, it's amazing on 12 months that you've got 1500 of these people, you know, installed actively using it. But like that first customer, how many have you actually converted to paid Oh, how many paying customers? Gotcha. I think we probably have about 50 paying customers. And what makes people convert?
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Chapter 3: What factors contribute to FusionAuth's revenue streams?
They actually... generate much more than, you know, a thousand dollars a month in revenue. So they're actually pushing our numbers up quite a bit. Um, you know, 10 million users, those kinds of user sizes, those guys are sustainable and they're going to be able to push and push. Even if the product that they're using us on doesn't immediately make revenue for small guys, they'll use us.
They might have a thousand users. They'll push and push for a year. And if they don't make any revenue, they have to close the doors. And who's we, what's the team size today? So there's a, there's six folks. How many engineers? There's four engineers. Okay. And then there are other two are kind of admin. Sales marketing. Okay. Are any of those folks carrying a quota? No quota yet.
We're doing everything is inbound. It's all marketing based. We're not we're not focusing on any outbound. And actually, we're we're almost not focusing on revenue yet at all. We really want to build the brand. We just happen to have customers that really want to pay us to support them. Totally happy to do it. But on the flip side, it's like we also just want to continue to build up our base.
Yep. So when you take in the salaries of the two people doing kind of sales and marketing, plus any Facebook ads, Ben conferences, et cetera, what is your fully weighted cat look like to get a new $6,000 account on fusion off? You know? Um, yeah, that's a, I mean, that's a really good question because we've just been pouring so much money into it without the need to like sort of get revenue.
Well, how much have you poured into it from the other company? I would say we put about 600,000 total. Okay, mostly engineering salaries? No, that doesn't include engineering salaries. That's basically ads, conferences, marketing salaries, sales salaries, like, you know, just basically growth. Yep. Yep. Okay, good.
So you put that money in, it's generated again, you know, call it $300,000 a year in terms of revenue. So yeah, not crazy. And you're in the early stages. Are any of those channels working better than the other ones? Yeah. So we're actually, we just did a website revamp We just made it so that you can go to the website and actually purchase hosting.
So that'll help get rid of some of the barriers. And what we're finding is that when we go to developer shows or we're really hitting developer-oriented marketing avenues, that tends to net out really well. Developers love the product. It's easy to download. It's easy to get up and running. It's easy to integrate. And they don't mind just saying like, hey,
Let's run this up the chain and see if we can get the executives to buy some support. And ignoring clean speak, right, and revenue, it does. If you just look at FusionAuth in a microcosm by itself, all your expenses and the money it's making, is it profitable today or is it still burning cash? It's burning cash, for sure. Like how aggressive?
Are you talking like $100,000 a month or $10,000 a month? Oh, probably not that much. Probably like somewhere between $30,000 and $50,000. Okay, fair enough. Yeah. You know, it's, it's, and that's okay. Right. We, we always like to call CleanSpeak our series A. I was going to say, are you bootstrapped outside of CleanSpeak? Totally bootstrapped. Yeah.
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Chapter 4: How did FusionAuth acquire its first customer?
Thanks a lot.