SaaS Interviews with CEOs, Startups, Founders
How He hit $12k monthly revenue building the Zapier for Data
21 Aug 2023
Chapter 1: What is Shipyard and how does it help data teams?
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Shipyardapp.com is a SaaS that helps you move data between Snowflake and Google Sheets. They got launched in 2020 doing $12,000 a month today in revenue. 12 people on the team, totally bootstrapped, which we love as Blake scales down here in Austin, Texas. Hey, folks. My guest today is Blake Birch.
He's the co-founder and CEO of Shipyard, the quickest way for data teams to launch, monitor, and share workflows. Formerly, he's the head of data for PMG Digital Agency. He led end-to-end data strategy for brands like OpenTable, Travelocity, Sephora, and Gap, scaling marketing efforts through algorithms and automation. Blake, you ready to take us to the top? Yeah, absolutely.
Chapter 2: What customer success stories illustrate Shipyard's value?
All right. So, Shipyard, low-code data workflow automation. Give us a customer story. How is someone using you today? Yeah, so customers ultimately end up using us for like three main purposes. They're trying to move data between various systems that they have on hand. They're trying to set up data. Give me an example, like what two systems?
Yeah, so it could be from your database like Snowflake to Google Sheets. It could be something from like Amazon S3 to Google Drive or something else like that. We build out hundreds of integrations with various tools that people use so that they can easily move that data. But it's more than just moving data. That's what people...
typically use this for initially, but they might set up like data alerts so that they can know in Slack or an email if something's gone wrong with their data, or maybe if there's like particular customers and their sales file that they need to look at. And then we also have people using us for things like deploying machine learning models and evaluating the data, scoring leads,
Chapter 3: How does Shipyard differentiate itself from tools like Zapier?
um uh scoring uh internal customers and and that sort of thing so we're a wide net orchestration platform that allows people to mix and match low code and uh uh their own code together in order to solve these sort of problems with data you get this all the time in my audience will be wondering it so i'm going to ask people are going to say oh this feels like mulesoft or zapier is this the enterprise app here with alerts
Yeah, so the way that we sometimes sell ourselves is that we're a Zapier for data. Zapier and other tools, they focus a lot on if this and that logic. They do things that are very specific for one row and reacting to it. For us, it's more about the bulk data processing. So being able to handle gigabytes to terabytes of data and process and move that data between systems.
And those other tools just aren't quite built for that sort of process. And we wanted to make sure that we could bring a best in class tool specifically for data professionals to be able to do their jobs more effectively. That makes sense. I can't wait to hear how you price this. What's the average customer paying per month?
And do you tie it to number of calls or usage or seat based or product upsells? How do you price? Yeah, so right now, our median amount per customer is going to be about 400 in general, the way that we price per month.
Chapter 4: What is the pricing model for Shipyard's services?
And that's something where we're pricing totally based on usage. So it's a mix of user seats plus the runtime. that people actively have in the application itself. So for us, it's a very sticky product where people come in and they're usually not leaving. Hold on, Blake. You got to quantify that. When you say sticky, how low is churn? Churn is about 1%. We're not seeing people leave very often.
That's monthly or annually? Monthly. Okay. And that's gross or net? Gross. Gross.
Chapter 5: What is the current churn rate and customer retention strategy?
Do you have upsells? We do have upsells within the product itself. So it's something where there are additional abilities to extend how much access you have to logs or version control. Do you get API access and things like that? And we're working towards figuring out how to enhance security measures and things like that.
Because for the larger customers, they are typically wanting additional features like audit logging, the ability to control MFA, single sign-on, and good stuff like that. How would you rate yourself on your sales team's ability to upgrade historical accounts today? Can they upsell more than 12% to make up for the 12% churn annually?
Yeah, so currently we're not as focused on upselling the clients as much internally. A lot of it for us is still new customer acquisition. And for us, it's also more about making sure that people are having the right sort of experience so they are continuing to use the product and growing it that way.
We do see ourselves naturally scaling without necessarily needing an internal sales motion for people that have already signed up for the application. Have you quantified that? Can you look for people that signed up a year ago and say they naturally upsold because their usage increased?
Chapter 6: How did the pandemic impact the launch and growth of Shipyard?
Sorry, can you repeat that? Yeah. Can you quantify your expansion revenue? That's no touch because people signed up a year ago, their natural usage increased, and then they obviously pay more because of that. So upsell revenue is 3% or expansion was 4%. Yeah, so generally what we're seeing on our side is that people are growing their usage by about like 10 to 15% roughly on a monthly basis.
So they're continuing to grow things that way. Does that directly correlate to more revenue for you? You're expanding accounts 10% monthly? Yes, that does. That's crazy, Bill Blake. On average, you're expanding accounts 10% or those are your outliers? They are expanding by 10%. But the thing is, we start very low in terms of pricing.
For us, it's more about being able to get people in the door, being able to solve problems.
Chapter 7: What challenges did the founder face before acquiring the first customer?
And so the 10% is going to be minuscule at the lower levels. It does slow down, of course, as some of the customers are...
growing at like higher and higher rates of course for anything that is dealing with cloud usage or runtime people are actively trying to figure out how do we like scale back the usage as much as possible but they find more use cases it still ends up growing now that we understand what the company is today give us the backstory here when did you launch the business
Yeah, I launched the business back in 2020, right before the pandemic. So initially, the stages of acquiring customers and everything else was a little bit more tenuous as people didn't want to try out anything.
But it gave us a good amount of time to make sure that we could hone in, focus, and that we could build the best product once we knew that things were going to come out on the other side much better. Were you quitting PMG? Where did you experience this problem?
We have a very unique kind of backstory where we were solving a lot of problems at PMG with internal technology, where we were doing things like automating bids, automating budgets, ad creation, turning things on and off based on inventory files and stuff like that. And we were templatizing this to be able to run it across all of the Fortune 1000 clients that PMG worked with.
And we realized that there were much larger use cases than just the marketing side for all the data and the automation that we were putting in place. And so Shipyard is actually the child product of something that was built at PMG.
We ended up splitting things off and spinning the technology out on its own to focus on a totally different sort of ICP of your typical data engineer, analytics engineer, and everything else there.
Because we felt like with the massive amount of growth in the data ecosystem, that was something that we wanted to make sure we could capitalize on and help those teams be able to build workflows more effectively. A couple of years from now, you sell for 500 million bucks and PMG goes, wait, that was that Blake guy that worked during a PMG on that code that he didn't spun out.
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Chapter 8: What insights does the guest share about building a bootstrapped company?
We own a chunk of that. Let's send him a letter right now since we just read the Washington Journal article and make sure we get our 10% cut. Yeah. So they do have a stake in the company. Can't disclose specifically what that is. But we're part of now a larger parent company called Momentum.
It was internally grown, but it is multiple different sister companies that are in the data technology and marketing space. What's Momentum's website? Momentum.com. Oh, interesting. Is this sponsored by PMG? It's like their startup, their venture lab, sort of? Yeah, it is. It is something. It's less specifically PMG.
It's now its own separate entity, but it is multiple different sister companies that are all operating under one umbrella. Oh, yeah. This is Kadi Search Discovery. Oh, interesting. Okay. Okay. Interesting. So how does I mean, do you still feel like a founder, though? Like, do you own the majority equity of the company?
Or are you just basically like a paid CEO that, you know, makes a lot of money but only owns 5%? Yeah, I definitely still feel like a founder. I'm not too subject to various regulations on their side. In fact, it's something where there's a lot of operational freedom still to be able to maneuver however you need. That's nice. That's nice. Okay, so you get going in 2020.
Tell me the story of your first customer. Yeah. Honestly, our first customer was totally organic. It was something where we had all the website content out there and were able to solve a very specific problem. It was a consultant for a company called Rental Wheel. They help people get spinners or different wheels for their cars. He just needed a quick solution to be able to
get something up and running for their team. And that was our first customer, and they are still a customer today. So that's something where, again, the land that expand approach worked, that consultant is no longer there, but the company is still using us to automate their data workflows. That's awesome. That's awesome. Okay, so how many current customers today? Yeah.
So currently we have about 1,600 users to the platform. We have about 30 paying customers on our side right now. So, and I guess, tell me how you think about that. Do you spend a lot of time thinking about 1,600 to 30 conversion rates? Yeah. So we don't think about it. Some of those customers, like we look at usage internally to try and verify which people are using us the most.
There are going to be like a high sales opportunity. Sometimes it's for like little one-off projects. Ultimately, like as a product that has kind of a freemium model. Our purpose behind that is that a lot of our competition in the data orchestration space is actually open source software that is trying to sell cloud hosted solutions.
And so when you can use those things for free and do a proof of concept that way, we want to make sure that we're equitable as people are trying to do proof of concepts. So the conversion rate there is something that we're still actively working on and figuring out how to increase it more. Blake, can I take the 30 customers times the $400 ARPU you mentioned earlier?
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