SaaS Interviews with CEOs, Startups, Founders
How Loomly Hit 7k Customers, $4.2m SaaS Revenue Starting With An Agency
06 Feb 2021
Chapter 1: What is the main topic discussed in this episode?
Usually we look at annual recurring revenue. We are between four and five. And last year, I would say end of 2019, we were around $2 million. So we grew 100% in 2020. You are listening to Conversations with Nathan Latka. Now, if you're hearing this, it means you're not currently on our subscriber feed. To subscribe, go to getlatka.com. When you subscribe, you won't hear ads like this one.
You'll get the full interviews. Right now, you're only hearing partial interviews. And you'll get interviews three weeks earlier from founders, thinkers, and people I find interesting. Like Eric Wan, 18 months before he took Zoom public. We've got to grow faster. Minimum is 100% over the past several years. Or bootstrap founders like Vivek of QuestionPro.
When I started the company, it was not cool to raise. Or Lookers CEO Frank Behan before Google acquired his company for $2.6 billion. We want to see a real pervasive data culture, and then the rest flows behind that. If you'd like to subscribe, go to getlatka.com.
There, you'll find a private RSS feed that you can add to your favorite podcast listening tool, along with other subscriber-only content. Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello, everyone. My guest today is Thibaut Clement.
He's a self-taught programmer and began building software to make Naomi's job easier in 2015. Back then, the pair was managing a marketing agency and developed an in-house solution to streamline the process of creating and sharing editorial calendars with their clients. Encouraged by early feedback and peers about the prototype, they launched and made it available to other marketing teams.
This company today is called Loomly. All right, Thibaut, you ready to take us to the top? Yes, sir. Now, who is Naomi? Is this your partner? Yes, she's my spouse and the co-founder of Loomly. That's so sweet. So you built your spouse software and now you guys are co-founders. Yeah, I guess we can feel that Loomly is kind of the most romantic gesture I've ever done. Here's the real question.
Who has more equity? Well, we are exactly on par. Wow, 50-50. So what if you disagree on something? How do you break the decision to tie? Uh, we have a board. Well, usually we agree, but we have a board in case, you know, something happens. So, you know, like any kind of startup, uh, that is venture-backed. How'd you build the board?
Uh, well, you know, it's, it's people who, uh, have been following us and helping us, uh, since the beginning. So it made sense to, uh, you know, have them join the board. How many people are on the board? Four. Four people. Well, that's like rule number one of boards is never have an even number. Well,
It's not because there's an even number of people that we have an even number of voices or votes. But usually people do three, five, seven, because the whole purpose of a board is to split a tie. But if then the board could tie two, two, then what? What do you do? Well, like I said, we don't have the same number of votes. I have more votes. Oh, I see. I see. I see. I understand. Okay, very cool.
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Chapter 2: How did Thibaud and Noemie start Loomly?
Now it's 15 days. But at that time, it was two months. So we launched in February. Two months later, we had our first paying customer. Okay. But where did you get that customer from? That doesn't just magically happen. You have to make it happen. Well, you know, Noemi and I, we used to have an advertising agency.
So we were in all those, you know, social media marketing and digital marketing groups online. And so once, you know, we built the product because we built it for ourselves in the first place, we started to share it in those groups. And we said, hey, we built this tool for us. Are you interested in giving it a try?
Then, you know, people started signing up and they started saying, yes, I've been looking for that for 10 years or I've been trying 10 different products and none of them is doing what you do. So that's how I started. How much revenue did the agency do in 2015? Well, that's usually something we don't share because it's kind of not relevant to me. Well, it actually is, right?
So when you look at the success of a lot of the largest SaaS founders, Hootsuite included, they usually start as an agency. And then there's a very tricky moment for the founders where you have to figure out, do we stop the agency and go all in on the SaaS? Do we do both? Or do we kill the SaaS instead of doing the agency?
So by asking how much revenue you did, it helps me understand what you guys gave up to go all in on the SaaS. Yeah, we had an agency in France. We had an agency here in the US. It was enough to sustain everyone. We were growing nicely.
But it was very clear once we started having feedback on a product that the product would be just more potential because it was basically allowing us to do what we were doing for a couple of clients, but at scale. And today we kind of serve 7,000 clients around the world. you know, that's, you know, it kind of proved to be true.
So this wasn't a situation where the agency was doing 10 million a year in revenue. You shut it down. It was like a smaller than what, like a million bucks a year or less. Yeah. I see. I see. Okay. That makes more sense. So, so how, let me know. The second question is, did you use agency cashflow to invest in the software at the beginning or how did you fund the MVP? Yeah. Yeah.
That's exactly what we did. So I wrote the first line of code in August 2015. And we only incorporated what is now Loomly in July 2016. So during that entire time, we were kind of working by day on the agency. And then with whatever money we were making, we were kind of financing the hiring of our first engineer and some marketing and all the expenses that come with building software.
So it was just you two at the agency then? Yeah. Oh, wow. I mean, in the US, but yeah. How many total people were full-time at the agency? It depends. You know, it's like agencies, they always kind of go up and down, but it was like, you know, anywhere between four and six. I see. I see. So did you move most of them over now? They're still with you on the SaaS product?
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Chapter 3: How did they acquire their first paying customer?
Now, are they still sort of doing like unpriced safes or have you had a price drowned already? Uh, no, it's, it's, it's, uh, it's, it's only a seed and it's a safe. Oh, I see. I see. Okay. So, I mean, do you have any plans? I mean, great growth rate, any plans to raise this year? Uh, we don't need. to raise this here. We are growing pretty well.
You know, if at some point there is an interesting opportunity that comes up, we'll of course look at it. But it's not what we need at the moment. Do you, have you set yourself up with basically unlimited runway? Are you profitable today? Yeah. Okay.
So, I mean, how do you, you know, when investors and VCs put money and they really want you to be like foot on the gas, I mean, do your board meetings, do you ever hear something like, Thibaut, we shouldn't be profitable. We should be investing all in growth. Like we should be raising capital. You're growing. Go, go, go. Well, we are actually, you know, we're good on both fronts.
We are good on growth. We are good on profits. So we have found like the right balance for us. The board is on board. So, you know, we are kind of, you know, maximizing the growth that we can absorb at the moment. Uh, so, you know, all seems pretty organic and, and, and it feels pretty good.
But I mean, once you get on the VC path, especially, you know, raising 3 million bucks, I mean, and, and numbers that at this level, like three 50 million in ARR, I mean, you like growth rates have to be like even larger. I mean, a hundred percent year over year is fine, especially if you're bootstrapped, but you've raised.
So like, how do you, how do you go instead of finishing this year with 8 million, how do you finish it with 12 million? Well, we keep improving the product. The 100% growth rate is our conservative forecast. We feel like we can do better than that as we keep improving the product and the KPI can also improve.
So it's not necessarily a matter of how much we raise and what the investors want because they kind of trust us on that front. What would you tell founders that say, you know, I don't want to work on that product. Someone's already done it before.
I mean, many could argue what the space you're playing in has been done over and over, but you've built a unique mousetrap that's given you 8,000 customers. What advice would you give those entrepreneurs? Well, the first thing is I'm not on the team of people who say, you know, if there is It's a crowded space, you shouldn't go.
I'm actually on the team that says if it's a crowded space, you should go because it means there is demand. So that's number one. Number two is when you do go on a crowded market, there are still ways that you can win depending on what others are not doing right.
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Chapter 4: What challenges did they face transitioning from an agency to a SaaS model?
This is great. Let's, uh, let's wrap up with the famous five. Number one, favorite business book. Uh, I love, uh, how to win friends and influence people. I don't know if it's a business book, but I love it. Of course it is. Yeah. Number two, is there a CEO you're following or studying? Um, Not necessarily. I mean, well, you know, like everyone, I like Paul Graham and Elon Musk.
Not very, you know, eccentric. Number three, what's your favorite online tool for building Loomly? GitHub, of course. Number four, how many hours of sleep do you get every night? I try to get eight. And what's your situation? Married, single, kids? I'm married to my co-founder. Married. Any kids yet or no? Yeah, one kid. One kiddo. And how old are you? Two and a half. Sorry, how old are you?
Oh, how old am I? Sorry, I'm 33. 33. Last question. What's something you wish you knew when you were 20, Thibaut? You know, just don't listen, don't try to please your friends or your family or your investors or whatever, just try to please the customers. It will save you a lot of time and hurdles. Guys, Loomly helps you schedule and plan your social media calendar.
They've just passed a $4 million run rate, up 100% year over year from a $2 million run rate, got their first 100 customers by basically shutting down their agency in 2016, launching this, had a paywall and $12 a month price point from the beginning, so they had validation early on.
Now today, again, growing rapidly, almost 8,000, between 7,000 and 8,000 customers, $3 million raised with just a team of seven. So healthy revenue per employee. They've been very capital efficient, spending 250 bucks to get a new $50 a month customer. We'll see what Thibaut does next. Thibaut, thanks for taking us to the top. Thanks for having me, Nathan. It was a pleasure.
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