SaaS Interviews with CEOs, Startups, Founders
How I Built my AI Tool SubMagic to $667k/Month With a Tiny Team and No Funding
10 Jun 2025
Chapter 1: What is the current revenue and growth status of SubMagic?
Today we are at 8 million ARR. The company is three years old. Even 5,000 to 10,000 signups a day. Do you have an idea of how many new paid customers you got last month? I think it was around 2,500 customers last month. We have more than 10,000 affiliates today. We have a very generous program, we give 30% revenue on the lifetime value of the customers.
Our churn is around 15% today, so it's very high month over month. Do you have a sense of, you said it's not big, I mean we're talking like under 20K a month in paid ads? Probably more, I would say between 20 and 50k a month. Hey folks, my guest today is David Zetoun. He is building Submagic.co. It is a tool that enables you to create viral shorts very quickly from short form or long form video.
They're launching new products like their AI caption tool today.
Chapter 2: How does SubMagic's affiliate program contribute to its success?
We're excited to have him on the show. David, you ready to take us to the top? Thank you very much for receiving me, Nathan. Pleasure to be here. You bet.
you know us americans all we care about is money you know you're you're pure still coming up in in france so i don't want to bury the lead here can you before we jump into your product and sort of what you do can you share what top line revenue is today Yeah, today we are at 8 million ARR. The company is two years old. We're still very young.
Most of our business is coming from the US, so from your country, Nathan. And we are proud of that as we are French originally with my co-founder. But yeah, small team, 13 people in the company today. And yeah.
that's incredible and we're recording this on june 5th so everyone has context so david this is obviously a very hard hot space and um ai and video you know video is obviously tricky to deal with because the files are so huge and there's so much context you have to have and then you have to sort of make the shorts the captions etc so i'm really interested to learn and sort of get more into the technology uh before we do that though let's take people through sort of the product experience here right so i went ahead and recorded this just ahead of time just so you could talk through it as we go through it here so
Obviously we're on the website, right? It's viral shorts. We're going to go in here and I'm going to click try for free, create free shorts. One thing you do differently than others. You don't ask a bunch of qualifying questions in your onboarding. You're going to see here, you take me directly into like the email and I'm in the interface. Why'd you make that decision?
Okay, so one of the reasons why we did that is that we wanted to build like a three clicks products and wanted to do everything in three clicks to make the experience super easy. So this was most the focus of my co founder that is a technical guy. He spent like eight years before building some magic building a website builder.
And he learned about like the importance of simplicity and how you can make everything in three clicks. And
editing videos you said are you saying are you saying in three clicks in three clicks yes three clicks yeah yeah yeah uh and it's it's it's very like i would say trendy to say that but the reality is like editing videos is complex and i've been using i've been editing videos since i'm 12 years old i'm 28 today so i've tried all the tools sony vegas premiere pro all the complex tool and
I know how to edit, and it still remains complex for me.
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Chapter 3: What are the unique features of SubMagic's product?
So trying to get this three-click experience as much as possible on a short form content product was, I would say, the most important thing for us as a product. So we try to avoid all the distraction around the product and be really focused on what matters for the users. Yep. This was my first moment where I was like, dang it.
If I wasn't about to interview this guy, I might drop off here because I uploaded a video that was a 20 minute interview. And I'm like, oh, it's too long. I don't want to go do the work to edit it down short. But then I saw this extra feature you, you guys launched recently. It looks like over here where it said, wait, get clips from a long video. So, so I then, I then tested that.
Help me understand that. Is that, was that just a demand you got from the user base, longer videos? Yeah, so we started with the captions on Submagic. The tool was super focused on one thing, that we wanted to do it better than everybody else. And it was how we can add amazing captions on your short form content to make your content go viral.
And so we started with this, we had to be focused on that. And then later on, we had a lot of people asking us like, hey guys, it would be amazing if we could put like our long form content into Submagic and you find automatically like the best, like viral moments.
So because we know already how to make a content that goes viral with the editing, we added these tools called magic clips that you're trying to use. And so, yeah, it's amazing, it's great. In this new age of AI, obviously pricing and paywalls and usage-based pricing versus seat-based pricing is a very hot topic. So I always like the moment when the user first hits that paywall experience.
You guys chose to put it right here. Help me understand sort of why this was the right moment to introduce the paywall. That's a good question. I don't know when you tried that, but it's been like, I think very recently, potentially. I did it like literally 50 minutes ago.
yeah so we are always testing new things and we love testing things we don't know anything we're just trying things and see what what works so before that before like a week ago magic clips was free for everyone they could try like at least one magic clips
And so with the result we had is that we have a lot of users trying Magic Clips with a conversion rate, what is pretty much okay, but we wanted to see like, is it really useful to give like a free clips to these users? And let's try to just put the payroll and see what is the results.
so we are still in the experimentation but uh yeah i will let you know later what's going on with this um we might go back to what we did before but it's just test and i think it's important as a company and this is one of the reasons why some magic we we grew that fast is that we were we've been able to test a lot of things very fast and to iterate using any tool to sorry to cut you off david there but are you using any tool to run these paywall tests like super wall or are these all custom coded by our engineering team
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Chapter 4: How does SubMagic simplify video editing for users?
That data is obviously wrong, but when did you hit a million of ARR? So we, we hit a million in ARR three months exactly after we get our first customers. So we had a first customer, the 1st of May, 2023, we get, we reach millionaire of ARR the 1st of August. Exactly. Wow. Okay, August 2023 million. And what drove most the growth from zero to 83?
If you had to pick only two growth channels, what were the two most impactful? I would say short form content. I will explain just after but I would say short form content and timing. Timing because there is a time to like time market fit that I really believe in business in general, like we were at the right time.
with the right product, with the right value or chat GPT at this time, everybody wants to make like short form. Alex was like literally booming online. Everybody wants to like start understanding like, hey, we should do short form content and we should make caption as well because everybody, like all those influencers are making caption, we should do the same.
and then short form because at the beginning of some magic we had like a lot of like viral short form content coming not from us but from users saying like hey I discovered this new tool called sub magics they can allow you to make like three clicks captions super easily on the product like and they show the product like this and so many videos went viral and this two mix was just an explosion I would say
Yeah, yeah. It's interesting. I wasn't expecting you to give those two answers. What I thought you were going to say was your affiliate program and product hunt. So I want to dig deeper here, right? So you saw that natural organic posting like happening, but you then launched your affiliate program, I think fairly early on. When did you launch that?
And would you consider that a key to going from zero to a million quickly? We launched the affiliation program pretty much like
i think it was 30 days after we had our first customers because at the beginning of some magic we had zero euros to invest into marketing and i was used to do affiliate uh marketing in my first company where i was myself and affiliates for other uh businesses and so affiliation is amazing when you not have a lot of revenue it's super like it's a good way to like attract people and pay them only if they make sales so we had no choice to do affiliation so i started this affiliate campaign
And I was just telling people like, if you make a viral short form content talking about Submagic and it goes viral, you're gonna make a lot of revenue because myself, I did it once and the short form went, I think it did like 100,000 views and it drives like $3,000 MRR directly. And I say to my users like, this is the proof that it's working. You should do like kind of content like this.
I really literally teach them how to make viral short form content talking about Submagic. And they just like keep posting content over content over content every day because they were making revenue. The success of a good affiliation program is your affiliates needs to make revenue and needs to make money out of it. So yes, affiliation is- Can you share that number?
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Chapter 5: What role does AI play in SubMagic's operations and growth?
Yeah. The other thing I want to touch on, and again, the reason I'm hitting on all these, I like to sort of create frameworks for my audience. And one of the frameworks I like to have them think about is there's really only about 34 ways to grow your software company. There's cheap stuff. There's expensive stuff. There's fast stuff. And there's stuff that takes more time.
You over here used influencer marketing. You used affiliates. We have Product Hunt here. You used Product Hunt early on. You did three launches. Ironically, you're one in 2023, which was what this was four months after you launched. Take us through this launch.
two months after we launched first of may third of july someone told us like guys you should do a product and because at this time we had zero customers on the us and my co-founder and i decided to say like we should change the strategy we are going fully into the us forget about the french country let's go for it and so he said like there is one thing we can try is product and apparently something good for software so we try that
Chapter 6: What strategies does SubMagic use to manage customer churn?
And from this day, it was the best decision ever because our main market became the U.S. from this day. Is Alex Ramosi an affiliate of you guys? No, we would love to, but he's not an affiliate of Submagic. He loves the product. I met Alex Ramosi a year ago. No, he's not an affiliate. We would love to, but he's not. That's great.
Any tactics you would give other founders who are trying to figure out how to hit the number one or number two spot on Product Hunt like you did? It's really hard. I wouldn't recommend everybody to do Product Hunt again, to be honest, because I think it changed a lot since we launched two years ago. You haven't been able to really get that same sort of upvoting in the past two years.
It's gotten harder.
it's super hard it's the energy you have to put to have to become like number two it's like 24 hours reaching out everyone to say like please vote for my product checking my product so it's a lot of efforts i think when you just started and you don't have a lot of choice it's something good to do but after like we we don't care if we are like eight in the day or tense when we launch again on product and just wow i don't see if yeah
Okay, well, cool. Let's fast forward. So May 2023, you launch your first million of revenue in August of 2023, a couple months later, and then about a year ago, and recording this of June 2025. So call it June 2024. You talk about hitting your 1 millionth user walk us through this milestone, what drove most of this growth? Yeah, man. It was an incredible milestone.
For me, one million users is much more incredible than one million error. Because it's a one million period. And I always like imagine myself like a stadium, 80,000 people, multiple by 12, 13. Like I'm like, wow, it's huge. And they tried my product at least once.
I think it's a mix of the time to market that I told you, the good marketing that we did since the beginning of Submagic, we push super hard on the brand and on the marketing through affiliation, SEO, paid ads, influence marketing. And there is this kind of like word of mouth that have been driven a lot of growth for Submagic. We are super focused on the customer experience.
And as a bootstrap company, like the best marketing you can have is like word of mouth, it's free. And so we really get inspired by Brian Chesky from Airbnb about this 10 star customer experience, how you can give like an amazing experience to your users.
And so we try to do like super like incredible things with our users, creating WhatsApp group with them, building the product directly hand to hand with them. I take like approximately five to six calls with users every day since the beginning of Submagic. Like everyone can book a call with the CEO of Submagic every time they want. And because I want to be super close to the users.
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Chapter 7: How does SubMagic approach pricing and paywalls?
Managing the community is very hard. I would say we are not the best today on Discord. On WhatsApp, we try to do something very, very... It was, especially on the beginning, what we suggest to any founders is like the first hundred customers of Submagic, I took on Stripe the information, I reach out to them, I say, send me a text message, please.
I will give you like a discount for the next month, but please send me a text message. I need to get your number. And those people, I put them into a WhatsApp group and I built the product with those 100 people. I was super close to those people. They were like, we say like, YC say like, find 100 people that love your product.
and I will try to do the kind of the same thing and this is free and you will understand that those people will become your best product manager ever because they will tell you what features they want and how we should do it like it's so like super like people try to
find solution to coaches to online to whatever the solution of your business is in the answer of your customers talk to them be close to your customers they have the answer um it's a cheat code it's a it's a yeah it's a cheat code but be careful not all your customers will be good customers
You have to determine if this guy, Feedback, is a good customer, if he's really the guy that we're trying to hit with our marketing or not. And does this feature is a really must-have feature or it's just a nice-to-have? And you have to be very careful about listening to your users and then taking good decisions. But yeah, this is a cheat code for me.
I want to get into your team here in a second, which you put up a great post on about three weeks ago, but we, I have to touch on the two other growth channels. You said you're using aggressively, which is SEO and paid ads. When I look at your SEO traffic, I mean really fast growth from 2023 to 2025 in terms of domain rating, you saw a huge pop in organic traffic.
I'm curious if this was intentional up to 9 million and then drop back down to about 235. Um, walk us through what's intentional around your SEO strategy. Yeah. So I'm not the best in SEO, to be honest. I don't know so much about it. But what I can tell you is the pics that you saw, it's a test that we have been trying. It's like we launched a free tools strategy at some point, at some magic.
So we created free tools like how to compress your video, how to download video from YouTube and stuff like that. And those tools were performing so well. In one month, it explodes. Can you quantify that in any way? Number of website clicks, number of customers, any kind of quantification there? The conversion rate was really bad, to be honest. And we learned from it.
At some point, 1 million visitors a month. It was crazy. Maybe even more. I don't remember exactly, but you saw the peak.
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